Indian Economic Scenario FY 13-14

IIP grew by 0.1% as compared to 0.6% growth in Q1 FY 2013-14.

- In terms of Sectoral Classification of Industrial Output of Manufacturing grew
0.11% in Q1 FY 2013-14.
Infrastructure Index April May 2013-14 recorded 2.37% growth than against
6.47% during corresponding period 2012-13.

Auto Industry scenario FY13-14

SIAM declared the Shrinkage of 2.10 % in overall sales volumes for the first quarter
(Q1) of 2013-14 (FY14), compared to a growth projection of 6-8 % for the full fiscal
year the industry would notch up smaller numbers this fiscal than in the last.
Expect utility vehicles has grown by 5.27% (projection 11-13% for the whole year)
every single segment has not only not met growth projections, but actually shrunk
anywhere between 0.82 %(2 wheelers) and 17.58 % (M&HCV) compared to same
quarter of the previous year.
Major factor has been bad sentiment as a consequence of the economic slowdown,
uncontrollable inflationary conditions, high finance rates.
M&HCV sales has decline for the sixteenth straight month.
Buses Sales in India down by 4.68% Q1 FY 2013-14 (Source ACG)
- MHCV down by 7.53%
- LCV down by 1.97%
Indian Truck Market Sales declined at 8.74 % in Q1 FY 2013-14(Source ACG)
- MHCV down by 17.58%
- LCV down by 4.21%
Average road freight rate index for Q1 (Apr-Jun) 2013-14 grew by 1.93% on a y/y
basis, higher than 0.30% growth in Q1 of 2012-13 and 1.64% growth in Q4 of 201213.

Future Scenario
GDP is expected to pick-up to around 6% in 2013-14
Softening of interest rate looking difficult especially when inflation has gone up to
4.86% in June13 after falling to 4.70% in May13.
Improvement in freight rates would be the key indicators.
Global and Indian manufacturers are focusing their efforts to develop innovative
products, technologies and supply chains in the industry.
ICRA Expect M&HCVs volumes to remain weak in the near-term as underlying
demand indicators continue to post a subdued picture. Surplus capacity in the
trucking system and currently weak transporter viability suggest that recovery in
the M&HCV demand is likely to be gradual.
CV sales in FY14 are likely to rise 7-9 percent, with light truck sales growing 10-12
percent. M&HCV sales will continue to see slow growth (1-3 percent growth forecast
by SIAM).

The fall of Rupee against Dollar, the increase in price for crude oil and fear of
inflation will install bigger hurdles to the Indian automobile industry in the coming
months.