General Motors India today said automobile industry is expected to grow by two per cent in this financial year.

"Last year (2011-12), in the beginning, we (industry) all thought that the market is likely to grow somewhere around 12-14 per cent. By the time the year got close, the growth was somewhere around only two per cent," General Motors India, Vice-President P Balendran told PTI here.

He said that the industry would not grow more than two per cent, and if one looked at last year's figures, General Motors sold about 92,435 units in the domestic market, which was down 17 per cent compared to 2011.

The company last year phased out three products, including premium sedan Optra, mid-size sedan Aveo and hatchback U-VA resulting a decline in sales.

"But this year, we should be able to register growth in tandem with the market", he said.

He said the company expects to launch its first multi purpose vehicle 'Enjoy' by March end or April and it would be competitively priced.

After launching the latest sedan 'Sail' in Tamil Nadu at a price of Rs 4.99 lakh onwards (ex-showroom Chennai), Balendran said the company hopes to sell about 48,000 units per annum, including its hatchback -- Sail U-VA across India.

"The market continues to remain sluggish. It is expected to improve only when the interest rates comes down. As far as my expectation is concerned, the market is expected to improve only after the budget, so in the second quarter," he said.

He said the entry-level sedan market has been consistently growing at 41 per cent over the last three years, comprising 40,000 units per month.

On government deregulating diesel prices and allowing a 50 paise increase every month, he said, "we are in favour of it. Because passenger car diesel consumption is only 1.06 per cent (of the total diesel consumption in India)".

A company statement said General Motors Halol facility in Gujarat is undergoing "capacity expansion" for its plan to introduce light commercial vehicles in the domestic market. On completion in the next few months, it would witness a capacity increase to 1.10 lakh units from 85,000 units, it said.

The Halol unit would manufacture LCVs in addition to other products, including Tavera and Captiva, it added.