There is some good news for car makers in India. According to a research firm, Deloitte, car sales are likely to bounce back in the country as inflation and interest rates are expected to come down in 2012.
Passenger car sales have fallen in the past few months due to various poor macroeconomic factors such as restrained growth of real disposable income, high interest rates and rising fuel prices, said the Deloitte report, ‘Driving Through BRIC markets — Lessons for Indian car manufacturers’.
“Car sales have declined, registering de-growth since July 2011, compared with the previous year and is not expected to recover unless the macroeconomic factors become attractive. In FY 2011-12, car sales are expected to grow by a meagre 2-3 per cent against 30 per cent in 2010,” it added.
The report pointed out that fuel prices have increased by up to 34 per cent since deregulation in 2010.
“The current slowdown is not here to stay as the fundamentals of car sales growth namely, urbanisation and car density are still very attractive,” Deloitte India Senior Director Kumar Kandaswami said.
Source: Economic Times
