India auto industry cuts sales growth forecast

Updated 10 January 2013
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India auto industry cuts sales growth forecast

MUMBAI: India's auto industry yesterday lowered its annual growth forecast for car sales for the third time this fiscal year, as a slowing economy and costlier loans keep buyers away from showrooms.
The Society of Indian Automobile Manufacturers (SIAM) now predicts sales of between zero and 1.0 percent, down from 1.0 to 3.0 percent, spelling bad news for global carmakers seeking to expand beyond stagnant Western markets.
"Our earlier forecast of up to 3.0 percent growth appears too distant. The overall sentiment is very weak," said SIAM's Deputy Director General Sugato Sen.
The New Delhi-based group said domestic car sales in December fell 12.5 percent to 141,083 units from a year earlier.
If SIAM's new forecast for the fiscal year to March 2013 proves accurate, it means growth will be the weakest since fiscal 2001-2002, when car sales rose by just 0.5 percent, analysts said.
Demand for cars in India has been weakening due to rising fuel prices, high interest rates and a slowing economy. Automakers are introducing new models and variants and offering discounts to woo customers.
Sen said the scenario could improve if taxes on automobiles were reduced and inflation and interest rates started to ease.
Car sales rose between 2004 and 2011, with a jump over the fiscal year 2010-2011 of 30 percent to 1.98 million units, as an increasingly affluent middle class snapped up new models with the help of cheap loans.
Global auto makers such as Ford, General Motors and Nissan have invested millions of dollars in the past few years in India to capitalize on this growth market and use the country as a global manufacturing base.
"The economy is stuck in a slow lane, which has hit demand," said Mahantesh Sabarad, auto analyst with Fortune Equity Brokers.


Hajj season boosts Middle East hotel demand in August

Updated 24 September 2018
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Hajj season boosts Middle East hotel demand in August

  • Occupancy rates — a measure of the proportion of available rooms sold — in the region jumped to 63.4 percent from 62.1 percent
  • The average daily room rate — another key industry metric — increased 12.2 percent to reach close to $170 per night

LONDON: Demand for hotel rooms across the Middle East leapt last month providing welcome relief for an industry that has been grappling with an oversupply of hotel accommodation, new data showed.
Occupancy rates — a measure of the proportion of available rooms sold — in the region jumped to 63.4 percent from 62.1 percent, according to data provider STR’s research published on Sept. 24.
The average daily room rate — another key industry metric — increased 12.2 percent to reach close to $170 per night, while revenue per available room (RevPar) increased by 14.5 percent to reach $107.50.
The region’s hotel sector has been under pressure due partly to the impact of low oil prices and geopolitical risks, resulting in a slump in room revenue and occupancy as supply exceeded demand.
“It is true in the broader sense that we have been seeing a softening of market-wide RevPar levels in the hospitality sector across most major cities within the GCC countries,” said Ali Manzoor, partner, hospitality and leisure at property consultancy firm Knight Frank.
Analysts have blamed the year-on-year uptick in August on the earlier Hajj season and Eid Al-Adha holiday, rather than indicative of a change in outlook for the sector.
“The spike in occupancy levels in August was largely attributable to differences between the Gregorian and Hijri calendars,” Manzoor said.
This year, the pilgrimage period took place in August, helping to boost the industry’s performance that month. “It is therefore reasonable to expect hotels to underperform in the month of September in relation to last year,” he said.
Looking at data for the year-to-date, the UAE retains the highest occupancy rate in the Gulf region at 72.2 percent, though this represents a slight decline of 0.8 percent compared to the same time period last year, according to STR data.
Saudi Arabia’s occupancy levels stood at 58.1 percent year-to-date, marginally up by 0.2 percent on last year.