According to the economic think tank, driven by a likely 32.7% growth in the multi-utility vehicle segment, passenger cars and vans, the segment is expected to record a slightly faster 6.2% growth in FY13
Mumbai: Automobile production in the country, which took a hit due to the high borrowing costs and rising fuel prices coupled with weak consumer sentiment in the April-August period, is likely to bounce back in the second half and may end FY13 with about 6% growth, the Centre for Monitoring Indian Economy (CMIE) has said, reports PTI.
The recovery in the production is expected to come on the back of festival season and a host of new launches by auto companies, CMIE said in its latest report.
"We expect automobile production to grow by 5.8% in the current fiscal. Yet, this will be considerably lower than 13.8% recorded in the previous fiscal."
The Reserve Bank of India (RBI)'s continued hawkish stance on key policy rates and rising oil prices along with deceleration in consumer demand impacted the auto production in the five months of the fiscal as it grew by a muted 4.1%, the report said.
According to CMIE, the two-and three-wheeler industry, which accounts for almost three-fourths of total production, is expected to grow by a mere 5.9% during the fiscal, impacting the overall industry's growth.
"However, driven by a likely 32.7% growth in the multi-utility vehicle segment, passengers cars and vans, the segment is expected to record a slightly faster 6.2% growth," the city-based economic think tank said.
Passenger car and van production dropped by 2.4% in the April-August period, the report said, adding however the festival season, new launches and resumption in production at the Maruti's Manesar plant will help passenger car and van output to grow by 2.6% this fiscal.
The industry saw launch of a new Alto from Maruti, the Rexton and Quanto from M&M, Indigo Manza Club Class, Safari Storme from the Tatas, the new Figo from Ford, and the automatic version of the Honda Brio in last couple of weeks.
A likely pick-up in manufacturing activity and higher agricultural and export-import cargo in the second half is expected to generate a higher demand for transportation.
This, subsequently, will help limit the fall in medium and heavy commercial vehicles production to 6.4% from 4.2% in the April-August period, the report said.
However, light commercial vehicle production is likely to rise by a healthy 8.9%, it added.