Coupled with high interest rates

We do not expect the spread between diesel and petrol to narrow much further going forward due topolitical pressures to maintain diesel subsidies. It was BMI's view last year that the CV segment wouldeasily outperform passenger car sales due to demand for construction and infrastructure projects and itplayed out well for us.1% from 12.8% from 9. While we do not think such strong growth rates will continue, we see electric scooter price no reason tobe overly bearish on this segment. Although the price of diesel has increased, it is still muchcheaper than petrol.86mnunits, a growth rate of 6. It is our view thatthis segment will outperform the overall passenger vehicle market going forward and we expect thisstrong growth in UV sales to continue and provide an additional boost to overall passenger vehicle salesfor FY2013. Therefore, the strong demand for diesel vehicles is expected to continue. BMI believes new forecasts released by the Society of Indian Automotive Manufacturers (SIAM) inOctober 2012 are too bearish. SWOT Analysis India Auto Industry SWOT India Political SWOT India Economic SWOT India Business Environment SWOT Global Overview UK Boosts Europe, But Favourites Still Outperform Table: Passenger Car Sales 8M12 Incentive Boom For Japan, US Powers On Industry Risk/Reward Ratings Table: Business Environment Ratings -- Auto Industry Asia Pacific Regional Overview Japanese Autos: Outlining The Bear Case Alternatives Macroeconomic Forecast Scenario Table: India - GDP By Expenditure, Current Prices Breakdown Industry Forecast Scenario Production And Sales Table: India Autos Sector - Sales And Production, 2009-2017 Trade Table: India Autos - Trade, 2009-2017 Industry Developments Passenger Vehicles - Forecast and Analysis Production And Sales Table: India Autos Sector - Passenger Cars, 2009-2017 Company Developments Commercial Vehicles - Forecast and Analysis Production And Sales Table: India Autos Sector - Commercial Vehicles, 2009-2017 Company Developments Motorcycles - Forecast and Analysis Production And Sales Table: India Autos Sector - Motorcycles, 2009-2017 Company Developments Automotive Suppliers - Analysis Segment Developments Company Developments Company Monitor Mercedes Takes Knocked-Down Route To Asia Company Profiles Hyundai Maruti Suzuki Tata Motors Mahindra and Mahindra Bajaj Auto Demographic Outlook Table: India's Population By Age Group, 1990-2020 ('000) Table: India's Population By Age Group, 1990-2020 (% of total) Table: India's Key Population Ratios, 1990-2020 Table: India's Rural And Urban Population, 1990-2020 BMI Methodology How We Generate Our Industry Forecasts 9%previously to hit 867,000 units by end FY2013.Delhi, India (prHWY. We are revising our CV sales growth forecast to 7. Moreover, while sales of passenger cars and vans have stagnated recently, utility vehicles (UVs) such asMUVs have enjoyed very strong year-on-year (y-o-y) growth for the past few months. On the whole though, we are more bullish on India'sauto industry than SIAM. However, we agree with the headwinds seen by SIAM for the Indian auto market and are also revisingour FY2013 forecasts for the overall passenger vehicle sales market downwards to come in at 2. According to S Sandilya, the President of SIAM, the slowdown in economicgrowth coupled with high interest rates will further decelerate growth. While SIAM citied the recent diesel price hike as one of the reasons to downgrade growth in passengercar sales to 1-3%, we do not believe that the hike will have such a huge negative impact on this segment. BMI also believes that SIAM's commercial vehicle (CV) forecast revisions are overly bearish and we aretaking a more bullish stance. SIAM now expects passenger car sales to grow by 1-3% for FY2013 from aprevious forecast of 10%.