The Hindu : Consumer durables industry maintains steady growth: survey

Online edition of India's National Newspaper
Monday, Dec 09, 2002

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Consumer durables industry maintains steady growth: survey

By Our Special Correspondent

NEW DELHI DEC. 8. A survey carried out by the Confederation of Indian Industry's manufacturing council, ASCON, found that the consumer durables industry has continued to grow steadily over the period from April to December 2002, driven by exports and sustained domestic demand.

The survey notes that as the country's economy develops and matures, consumer preferences are changing, as a result of which production is falling in some sectors but rising steeply in others.

For example, within the vehicle industry, motorcycle production has risen by 43 per cent but scooter production has decreased by 11 per cent and that of mopeds by 15 per cent.

Cars have shown a low growth of six per cent but medium and heavy commercial vehicle production has risen by 27 per cent and that of light commercial vehicles by 32 per cent.

The linked industries of car tyres has risen by 15 per cent while bus and truck tyres have gone up by 10 per cent.

The survey shows the same changes in consumer preferences in the consumer electronics industry with the more expensive VCR, VCP and DVDs growing by 50 per cent but audio products managed only five per cent growth.

Colour television production rose by 25 per cent but black and white televisions have come down 20 per cent, the survey says adding that CTV and other consumer electronics exports also grew by 20 per cent.

As for car exports, these went up by 32 per cent during the April-December period while motorcycle exports shot up by 132 per cent, the survey said.

The growth of three-wheeler exports was the most rapid at 242 per cent. Medium and heavy commercial vehicles also went up by 22 per cent.

In the home appliance sector, production of air conditioners grew by 20 per cent, but that of water coolers rose by only six per cent.

While refrigerators went up by five per cent, washing machines sector witnessed only two per cent growth, it said.

The personal computer industry clocked an eight per cent growth while the lower-technology clocks and watches rose by ten per cent.

Despite the upbeat figure, the CII-ASCON survey highlighted the need to strengthen competitiveness of the Indian industry by taking company-specific steps to improve productivity. "Only a sustained effort over the long run targeting specific foreign markets will help exports,'' it says.

The survey stressed the importance of adequate and affordable availability of funds to boost production.

In the context of market-driven restructuring of financial sector, it felt the role of development banking needed to be rethought.

Finally, it pointed to the need for rationalising indirect taxes and urged that VAT should come into force next April while all other State taxes should be eliminated.

Meanwhile, the CII's manufacturing council comprising 115 heads of sectoral associations would meet Vijay Kelkar, Economic Advisor to the Finance Minister, to discuss indirect tax proposals as well as pre-budget issues.

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