New Delhi: Cutting car sales projection for the ongoing fiscal for the second time due to demand slump, SIAM on Wednesday said the auto industry will miss its ambitious target of clocking an annual turnover of USD 145 billion by 2016 under the Automotive Mission Plan (AMP).
Society of Indian Automobile Manufacturers (SIAM) lowered car sales growth projection to just 1-3 percent for this fiscal from the 9-11 percent announced in July.
With no signs of a "significant" growth in the next 3-4 years, SIAM also said the AMP target of annual turnover of USD 145 billion by 2016 will be missed by around 20-25 percent at the current rate of growth of the industry.
"Considering the low growth that we have seen in the second quarter of this fiscal and the overall macro-economic situation, we feel the car sales will grow around 1-3 percent this fiscal," SIAM President S Sandilya told reporters here.
If the car sales grow at this rate, then it will be the slowest since 2008-09, when it grew by just 0.18 percent, he added.
In the second quarter of this fiscal, passenger vehicle sales, including cars, grew by just 4 percent at 6,18,000 units as against 5,93,000 units in the year-ago period.
This is the second time SIAM has lowered the growth projection of car sales since it first forecast a growth of 10-12 percent for 2012-13 in April this year.
He said the overall economic situation of the country, low sentiments, high petrol prices and interest rates are among the factors hurting the overall sales of the auto industry.
"Even we don't expect to have a good festive season this time around," he added.
Overall, the auto industry's sales will grow by 5-7 percent, much lower than the earlier estimate of 11-13 percent for this fiscal, Sandilya said.
"If this current trend continues, then we will miss the AMP target of achieving an annual turnover of USD 145 billion from auto and auto-component manufacturers by 2016," he said.
The shortfall will be USD 34-35 billion and the industry would need to grow at a minimum of 16-18 percent in the next three to four years to achieve it, he said, adding "it is very unlikely that we will grow at that rate and we have missed the bus".
Sandilya said SIAM has already approached the government to extend the tenure of the AMP by another 10 years in the wake of the development.
"We have communicated to the government that we will miss the targets but we have not given specific targets if the mission plan period is extended to 2026," he said.
First Published: Wednesday, October 10, 2012, 14:29