Though industrial outputs rose by 2.6% in the month of January, the hopes of rate cuts by the Reserve Bank were crushed by the a 5.37% rise in retail inflation. This proves to be detrimental and cause for worry as inflation almost always surely results in costlier vegetables and beverages. But the industry has comforted the RBI and gave them a moral boost by asking them not to deter from the ultimate goal of growth. CII Director General Chandrajit Banerjee said: "There is marginal uptick in CPI inflation over the previous month.But this should not dissuade the RBI from continuing with its rate easing cycle to support growth in the forthcoming monetary policy announcement in April, especially as the performance of consumer durables continues to be muted and inflation is within the comfort zone of the RBI."
The RBI and Central Bank have revised their policy rates and have introduced cuts in their monetary policy review. The IMF has suggested, in it's monetary report that India need to keep it's monetary policy tight keeping in mind the pressures and upside risks. January however showed a remarkable improvement in manufacturing. Food inflation on the other hand, rose from 6.06 % to 6.79%. In particular, rate of vegetables rose by 13.01% ,pulses and products by a stunning 10.61% and fruits by 8.93%. Surprisingly, the rural areas showed a 5.79% inflation compared to the 4.95% of the urban segment. Power generation and consequently, electricity production also showed a comfortable increase. The mining sector has also seen a pleasant 2.8% increase in growth with consumer durables showcasing a growth of 5.3%. Overall consumer goods however faced a dip in sales by 0.5%.
The inflation coupled with increasing oil prices and also, consumption and generation of power will also have an impact on the sales of automobiles in the long run.
Automobile Industry Overview Feb 2014:
Over the year from the February of 2014 to the February of the following year, production has seen a stunning 6.3% growth. Domestic sales have also seen a similar growth of 5.7% over this period. Export units have also seen a staggering 16.8% in growth over the year. In all the industry has seen a good time over this year.
The overall sales of Automobiles has seen a flat graph, whereas the individual segments may have seen slight changes in the year from February 2014 to February 2015. Two wheelers have registered a decline of 1%, whereas passenger vehicles' sales have grown by 6% and similarly, sales of commercial vehicles have also shooted up by 10%. Three wheelers on the other hand have made up for the increase in sales in the other sectors by introducing their dip in sales of a stunning 10%.
Domestic segment is dictated by two wheelers who have captured a market share of 79.2% as of February 2015, slightly lower than the 80.1% market share in February the preceding year. Passenger vehicles also constitute a majority with their 15.1% market share this year, noted by a slight increase from the previous year's market share. Commercial vehicles and Three wheelers constitute a minority of the market share with their 3.5% and 2.2% respectively, this year.
In the production segment of Indian Automobiles, sales have been quite flat and have recorded only a 1% increase in sales. Two wheelers' production have seen a dip of 0.3%. Production of Passenger vehicles over the year from February 2014 to February 2015 however has seen a 9% increase with commercial vehicles recording another 8% increase in production over the year. Three wheelers however, have noted a significant decrease over this time by 19%. The production segment share is captured single handed by two wheelers with a share of 77.5% in February 2015, only slightly lesser than the 78.3% share the previous year. Passenger vehicles also hold a considerable share of the market with a 15.7% share with subtle shares in the production of both Commercial vehicles and Three wheelers.
Export:
Exports have witnessed a decline of 7% overall. Individually, not much has been achieved in this segment, as seen by the 3% dip in two wheeler exports, 3% dip in passenger vehicle exports, 6% decline in the same for commercial vehicles and a 2% dip in three wheeler exports over the year from February 2014 to February 2015. The export segment is however pioneered by Two wheelers, with passenger vehicles , commercial vehicles and three wheelers managing to capture a small share.
Source: SIAM, Autobei
