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.


Dubai rents stabilize for the first time in two years

Updated 22 April 2018
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Dubai rents stabilize for the first time in two years

  • Dubai rents unchanged in Q1, 3.1% lower year on year
  • But rental rates forecast to fall 5-7% in 2018 as new stock enters the market

Dubai residential rents stabilized for the first time in two years last quarter, according to real estate consultancy Cluttons, even as the imminent delivery of new rental stock is likely to further depress rates throughout the year.

Rental rates were unchanged for the first quarter of the year, Cluttons reported on Sunday, with 3.1 percent lower than the year-ago period. But rents are expected to fall by 5-7 percent over the remainder of the year, the consultancy forecast.

“We expect newly completed rental properties to command the attention of tenants, while older and more secondary property will register rent falls,” said Murray Strang, Head of Cluttons Dubai.

“This flight to quality phenomenon will likely result in the creation of a very distinctive two-tiered market. In the short-term, we expect rents to slip by up to 5-7% over the remainder of 2018.”

Sales values across the emirate’s residential market continued to slip in the first quarter, declining 2.5%, even as more affordable areas such as Discovery Gardens and International City were stable.

“One of the key factors that has likely contributed to the stability in values in Dubai’s more affordable residential areas is the distinct lack of new supply in these markets,” said Faisal Durrani, Head of Research at Cluttons.

“Affordability aside, We expect demand to remain firmly centered on new homes priced under 800 dirhams per square foot (psf) as affordability takes center stage in the market.”

Cluttons expects values to slip by up to 5 to 7 percent in 2018, with the decline persisting well into 2019, “catalyzed by the buoyancy of the supply pipeline.”

Office rents remained largely unchanged across the emirate, despite a 21 percent correction in upper limit rents in Bur Dubai. Such flat conditions are likely to continue through until the end of the year, Cluttons forecast, with free zone rates bucking the trend due to their desirability as submarkets.