GM Sees India Auto Market Up to 3% This Year image

GM expects auto industry in India to increase between 2% and 3% this year.

GM said it expects sales in India to increase to 12,000 vehicles this year from 8,500 units in 2012, relying on its newly launched models from the past 12 months and on the Multi Purpose Vehicle Enjoy, which is to be launched in April.

“Higher fuel prices, devaluation of Rupee against Dollar and higher inflation are the major bottlenecks in the growth of the industry in India. However, we expect movement of reforms front,” GM India president and managing director Lowell Paddock told media persons in the city.

Last year the automaker eliminated three models: the mid-size sedan Aveo, the premium sedan Optra and the hatchback U-VA, a move which led to the decrease in sales. The auto market in India is dominated by the A-class hatchback, which account for 75% of the market share, or 1.48 million units from the 2 million market.

“The market continues to remain sluggish. It is expected to improve only when the interest rates comes down. As far as my expectation is concerned, the market is expected to improve only after the budget, so in the second quarter,” Paddock added.