Automobile sector, one of the major consumers of Flat Steel products has not seen any significant improvement in its demand. Automobile Industry consumes 19% of total Flat Steel production in India. An overview of consumption pattern of Flat Steel products across different sectors is shown below :
Mixed Numbers for Auto Sector
The latest numbers from Industry association, Society of Indian Automobile Manufacturers (SIAM) reveals that, production has seen a modest growth of 2.1% between the periods of Apr’13-Dec’13 and Apr’12-Dec’12. The total production for Passenger Vehicles, Commercial Vehicles, Three Wheelers and Two Wheelers combined together, stands at 1,734,593. SIAM believes that, Two Wheelers segment has seen a good growth in this period and in fact has contributed to the overall growth.
Passenger Vehicles sales declined by 5.7% and Commercial Vehicles sales declined by 18.4 % between Apr’13-Dec’13 period as compared to the same period in 2012. Medium and Heavy Commercial Vehicles encountered de-growth of 26.9%, whereas Light Commercial Vehicles registered a decline in sales by 13.9% during this period. The slowdown in sales of Commercial Vehicles is owing to lack of mining activities and stalled infrastructure projects.
Two Wheelers sales have seen a growth of 5.4 % during the above period. Within Two Wheelers segment, Scooters sales grew by 19.8%, whereas Motorcycles sales grew by 2.5% in this period. Exports of Automobiles sector witnessed a growth of 6.1%.
Import Substitutes
Automobiles sector has depended on imports of Flat Steel products. However, increase in cost of production has forced some major manufacturers to find import substitutes for Steel products. Some market participants speculate that imports might have fallen due to reduction in imports by the automobile industry. A comparison of imports of Flat Steel products from Apr’13–Dec’13 is as shown under:
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