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.


OPEC oil ministers gather to discuss production increase

Updated 19 June 2018
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OPEC oil ministers gather to discuss production increase

  • Analysts expect the group to discuss an increase in production of about 1 million barrels a day
  • The officials were arriving in Vienna ahead of the official meeting Friday

VIENNA: The oil ministers of the OPEC cartel were gathering Tuesday to discuss this week whether to increase production of crude and help limit a rise in global energy prices.
The officials were arriving in Vienna ahead of the official meeting Friday, when they will also confer with Russia, a non-OPEC country that since late 2016 has cooperated with the cartel to limit production.
Analysts expect the group to discuss an increase in production of about 1 million barrels a day, ending the output cut agreed on in 2016.
The cut has since then pushed up the price of crude oil by about 50 percent. The US benchmark in May hit its highest level in three and half years, at $72.35 a barrel.
Upon arriving, the energy minister of the United Arab Emirates, Suhail Al Mazrouei, said: “It’s going to be hopefully a good meeting. We look forward to having this gathering with OPEC and non-OPEC.”
The 14 countries in the Organization of the Petroleum Exporting Countries make more money with higher prices, but are mindful of the fact that more expensive crude can encourage a shift to renewable resources and hurt demand.
“Consumers as well as businesses will be hoping that this week’s OPEC meeting succeeds in keeping a lid on prices, and in so doing calling a halt to a period which has seen a steady rise in fuel costs,” said Michael Hewson, chief market analyst at CMC Markets UK
The rise in the cost of oil has been a key factor in driving up consumer price inflation in major economies like the US and Europe in recent months.
Already US President Donald Trump has called on OPEC to cut production, tweeting in April and again this month that “OPEC is at it again” by allowing oil prices to rise.
Within OPEC, an increase in output will not affect all countries equally. While Saudi Arabia, the cartel’s biggest producer, is seen to be open to a rise in production, other countries cannot afford to do so. Those include Iran and Venezuela, whose industries are stymied either by international sanctions or domestic turmoil. Iran is a fierce regional rival to Saudi Arabia, meaning the OPEC deal could also influence the geopolitics in the Middle East.