Auto Industry: Need for Greater Stimulus

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Auto Industry: Need for Greater Stimulus

The impact of the first stimulus package does not seem to be reflected in December 2008 numbers. The cumulative production data for April – December 2008 shows production growth of 3.56 percent over April – December 2007. However, in December 2008, overall production fell by 21.96 percent over the same month last year. Therefore, the performance is indicative of a need for further action/ stimulus.

Domestic Sales

Passenger Vehicles segment registered de-growth with (-) 0.46 growth during April – December 2008 over April – December 2007. Passenger Cars fell by 0.28 percent, Utility Vehicles fell by 4.82 percent and Multi Purpose Vehicles grew by 7.82 percent in this period. However, the sales in December 2008 for passenger vehicles fell by 13.86% over December 2007 - with all sub-segments registering negative growth.

The sales of Commercial Vehicles Segment registered de-growth. The segment declined by 15.52 percent during April – December 2008 as compared to the same period last year. While Medium & Heavy Commercial Vehicles declined by 23.85 percent, Light Commercial Vehicles also recorded de-growth at (-) 5.40 percent. In December 2008 commercial vehicles sales fell by 58.29 percent compared to 2007. M&HCV fell by 71.19 percent and LCV fell by 41.97 percent. Also, buses (M&HCV) fell by 32.79 percent and even the smaller buses also fell by 37.18 percent.

Three Wheelers sales registered decline with growth rate being (-) 5.86 percent in April – December 2008. While Passenger Carriers grew by 13.38 percent during April – December 2008, Goods Carriers declined at (-) 38.44 percent. In December, three wheelers fell by 28.99 percent.

Two Wheelers registered marginal growth of 1.85 percent during April – December 2008. Mopeds and Scooters grew by 5.04 percent and 8.36 percent. Motorcycles grew by 0.30 percent. Electric two wheelers segment grew by 42.25 percent. However, Two Wheelers sales registered (-) 15.43 percent growth rate in December 2008 over same month last year

Exports

The period from April – December 2008 saw automobile exports registering a growth of 33.03 percent with all segments except Commercial Vehicles, registering positive growth.

Passenger Vehicles and Two Wheelers segment grew by 66.20 and 31.18 percent respectively. Three Wheelers exports grew by 13.97 percent in this period. Exports of Commercial Vehicles declined at (-) 13.51 percent in this period.

Source: http://www.siamindia.com/Media/Release/SiamViewMediaRelease.aspx?id=244