Automobile manufacturing slows down by 15.56% in April: IIP

The latest India industry statistics, as per the Index of Industrial Production (IIP) or factory output, are out. For April 2017, the IIP weightage for ‘Manufacture of motor vehicles, trailers and semi-trailers’ is 95.5 which is a 15.56 percent decrease compared to 113.1 for April 2016.

The overall IIP for April 2017 stood at 117.9, an increase of 3.1 percent compared to April 2016. The cumulative growth for the April-March 2016-17 over the corresponding period of the previous year stood at 5 percent.

As per use-based classification, the growth rates in April 2017 over April 2016 for primary goods, intermediate goods, capital goods and infrastructure/construction goods saw a change of 3.4 percent, -1.3 percent, 4.6 percent and 5.8 percent respectively.

The Central Statistics Office (CSO) has revised the base year for the all-India Index of Industrial Production (IIP) from 2004-05 to 2011-12. The CSO had said, “The new base year has been selected keeping in view the base year of other macroeconomic indicators namely Gross Domestic Product (GDP), Consumer Price Index (CPI). Several changes have been made in the new series of the IIP in order that new IIP is able to reflect the changes in the industrial sector in a more representative and robust manner.”

FY2016-17 has been a roller-coaster ride for the automobile industry with demonetisation impacting rural and urban sales and implication of BS-IV norms. With the monsoon expected to be normal across the country, and a slew of launches planned by auto OEMs, the sector is optimistic about sales and the segment witnessing double-digit growth. The major challenge for industry though is still to see a complete recovery from demonetisation as well as the implications of the newly introduced Goods and Services Tax (GST) that is set to replace all existing taxes.