AIAM realises its projections were too ambitious
Vivek Law & Murali Gopalan
January 20: The Association of Indian Automobile Manufactures (AIAM) has slashed its projections for the Indian car market by 100,000 to 750,000 units for the year 2001. Interestingly, 70 per cent of this production is expected to be cornered by the economy or the small car segment."We had projected a market of 850,000 cars by the year 2001 but given the sluggishness in the industry we are going in for a complete review of the projections. Now, we don't expect this segment to be more than 750,000 by 2001", Shripad Bhat, assistant director of AIAM, told The Financial Express .Bhat said that for the financial year ending March 31, 1998, the car market was expected to register a growth of 10-12 per cent at 4,50,000 units. The figure for 1998-99 is expected to be about 5,40,000 cars, a growth of 20 per cent. "This is not so bad compared to some other segments which have registered dismal growth. In 1998-99, the car market should witness a growth of about 20 per cent largely because of the clutch of
small car models that are slated to hit the market during this period", said Bhat. "The share of the small car segment will be down to 70 per cent by 2001 from the current levels of 80 per cent. But we would prefer to call it the economy class segment rather than a small car segment because most of the cars that are being talked of today for a possible launch are not typically small cars. Internationally, these are known as economy cars and we expect this segment to account for 70 per cent of the car market", said Bhat. He added that the sluggish trend could reverse by September if a stable government was installed at the Centre. "A lot would also depend on how the car finance companies perform. If these get squeezed of funds then there could be trouble", said Bhat. According to him, the agenda for AIAM for 1998 would be to lay stress on environmental protection. "We have to find a way out of making the used-car segment more environment friendly", he said. AIAM has proposed to set up an institute nearNew Delhi, which could certify an old vehicle. This certification would be recognised by the government. Other similar centres are expected to be added to the list once the concept catches on. "An old car could be tested for pollution at the facility and could be provided with a certificate of suitability to be on the roads. AIAM has agreed to invest in such a facility and the government has been supportive to the idea," said Bhat. The institute would first cater to commercial vehicles and then extend its services to the consumer segment that operates two-wheelers and cars. Bhatt said in the event of the vehicle being declared unfit for driving, AIAM would then consider moving it to another area which has higher pollution absorption capability.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
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