According to Jagdish Khattar, managing director, Maruti
Udyog Ltd and president, Society of Indian Automobile
Manufacturers (SIAM), the automotive industrys
performance is closely linked to industrial growth,
which during the year was around 7 per cent while agriculture
output had increased by over 10 per cent.
feels that the outlook for the year 2004-05 was promising
since the current growth rates of GDP and industrial
output appeared sustainable. This would ensure robust
growth in the automotive sector, especially since India
is the fourth largest economy (estimated at $2.5 trillion)
after the US, Japan and China in terms of purchasing
Industry Performance during 2003 04
During 2003-04 the automobile industry registered a
growth of around 16.5 per cent in sales and 24 per cent
The excise duty reduction on passenger vehicles in the
union budget 2003-04 has directly impacted the sales
of passenger vehicles positively as it has reduced the
acquisition cost to the customer. The cumulative passenger
vehicle sales in the domestic market in April-March
2003-04 have grown by over 27 per cent over the same
period last year. However, this is against relatively
low and negative growth rates in the previous years.
the passenger vehicle segment, while passenger cars
and utility vehicles have grown at 28.6 per cent and
27.6 per cent respectively, multi-purpose vehicles (MPVs)
have grown at a lower rate of around 14.5 per cent.
However, the growth of MPVs this year is significant
as it was (-)15.7 per cent in the last year.
The commercial vehicle segment has grown by over 30
per cent in consecutive years. This year, it clocked
a growth of 36.5 per cent. The medium and heavy commercial
vehicles segment grew by 39.5 per cent whereas light
commercial vehicles grew by 32 per cent.
improved economic performance, especially in the agricultural
sector, besides the expansion of national highways and
expressways, has led to fleet rationalisation in and
increased penetration of multi-axle vehicles. During
the year, 1998-99 sale of multi-axle vehicles was 4,539,
an increase of 67 per cent per annum over a five year
period. The total share of multi-axle vehicles in the
heavy vehicles category has grown barely 5 per cent
to around 40 per cent.
The two-wheeler segment as a whole grew by 11.5 per
cent during April-March 2003-04, lower than in previous
years though on a larger base of 4.8 million vehicles.
However, with the development of rural roads and better
connectivity with major towns and cities, the two-wheeler
industry expects a better performance in 2004-05.
with improved agricultural performance, purchasing power
in rural areas is expected to go up and positively impact
two-wheeler sales. With changing consumption pattern
in semi-urban and rural areas from food to non-food
items (down to 40 per cent compared to 88 per cent twenty
years back, better two-wheeler sales are expected in
Passenger vehicle exports have crossed the hundred thousand
mark and clocked sales of around 1,30,000, while two-
three-wheeler sales have crossed the three hundred thousand
mark for the first time at around 3,33,000. Commercial
vehicle exports have also increased to an all-time high
of over 17,000. In per cent terms the growth during
the year over the previous year have been almost 80
per cent for passenger vehicles, over 49 per cent for
two- three-wheelers and over 40 per cent for commercial
SIAM expects a healthy growth in sales (including exports)
in the automobile sector in 2004-05. Segment wise growth