"The growth figure that we are now working out for that 12th Five-Year plan indicates that we may see domestic traveler vehicle sales of 5. 6 million units and the export of just one. 3 million units by the end of 2017, " SIAM President Pawan Goenka said in the industry body's annual summit here.
Vehicle manufacturers as well as component players have to plan their investment and capacity expansion strategy to meet this particular demand, he added.
He, however, said due to the slowdown recently, the industry "may have to revise the growth projection with regard to passenger vehicles and commercial vehicles further".
SIAM said it may further lower its growth projection for vehicle sales in the united kingdom from the earlier estimate of 11-13% announced two months back again.
In July, SIAM had lowered its vehicle sales growth forecast for FY12 to 11-13% in the earlier estimate of 12-15% made in April, mainly due to raised interest rates and rising fuel prices.
"As money and energy became expensive, the market sentiment was gravely affected and the actual passenger vehicle segment de-grew 8. 9% in July and once again by 5. 7% in August, " Goenka said, adding how the industry is hoping that the forthcoming festive season will visit a recovery in the passenger car sales.
Talking about diesel costs, Goenka said the government should come out with a national plan and technique for utilisation of the fuel in the transport sector, rather compared to discourage its usage.
Similarly, a renewed focus needs to be placed on strengthening of infrastructure for gaseous fuels such as CNG as well as LPG, Goenka added.
He also urged the government to extend the job Entitlement Passbook Scheme, which incentivises exporters with tax benefits, past September 30, as no alternate scheme has been offered to date.
In addition, he said: "The auto industry is awaiting the actual implementation of GST, which will eliminate many of the embedded taxes which make the industry globally non-competitive and create distortions. "
Goenka further said the Indian auto industry can play an extremely critical role in achieving the manufacturing sector's target of contributing 25% from the GDP by 2025.