India auto sector growth to help natural rubber, metals

MUMBAI (Commodity Online): Metals and natural rubber are expected to get a fresh impetus on rising automobile sector in India. The country's automobile sector is poised to grow between 1-15% in 2011-12 on the back of good economic forecast, higher disposable income and increasing rural demand, according to Pawan Goenka, President of Society of Indian Automobile Manufacturers (SIAM).
Metals prices which were subdued in recent weeks on Japan tsunami and Chinese monetary tightening measures is now witnessing positive trends with most industrial metals rising on optimism global economic groth will sustain industrial metals demand. Lead has advanced to the highest level in three years and aluminium has reached the highest level since Septmber 2008, Bloomberg reported. Natural rubber prices have climbed by Rs 100 per kg in Indian markets in the past one year from Rs 140 levels to Rs 240 levels although prices dipped to Rs 185 levels following the impact of Japan tsunami. Natural rubber production is forecast to reach 10.06 million tonnes in 2011, up from a previous forecast of 9.7 million, driven by expansion of planting areas and higher yield, the Association of Natural Rubber Producing Countries said on Monday.
Apart from India, positive reports regarding passenger car sales have also emerged from USA in recent months boosting the prospects for natural rubber and metals industry. India's passenger vehicles segment grew at 29.85 percent during April-February 2011 over same period last year. Passenger cars grew by 30.34 percent, Utility Vehicles grew by 19.69 percent and Multi-Purpose Vehicles grew by 43.28 percent in this period. February 2011 figures for domestic sales of Passenger Cars show a growth of only 22.63 percent over the same month last year. However, in absolute numbers, this segment recorded highest ever sales. Total passenger vehicle sales figures for February 2011 compared to February 2010 shows growth stands at 20.88 percent, according to SIAM.
Apart from that, the India government decision not to increase excise duty on cars in budget will further fuel growth in the sector, Mr Goenka said. During the year, the passenger vehicle segment is expected to grow between 16-18 per cent, where as the two wheeler segment is expected to see a growth of about 12-14 per cent, he said. The commercial vehicle space is forecasted to grown between 14-16 per cent, however, the growth in three-wheeler segment will dip down to about 9-11 per cent. Moreover, during the current fiscal the country's apex body expects about 50 new car launches.

(Source: http://www.commodityonline.com/news/India-auto-sector-growth-to-help-natural-rubber-metals-38041-3-1.html)