Tuesday, June 07, 2011
By Pranjal Gera
Auto industry going through a slow down
The recent growth seen in the Automobile Industry is slowing down. Since last one and a half year, customer sentiment has dropped due to rise in fuel prices and hardened car loan interests. This has burned an augmentation in the demand of cars. In May 2011, there was a sheer 5% growth registered as compared to 35% growth last year. Maruti Suzuki, India's largest car maker and GM saw marginal increase in sales while Honda reported a decline. Almost every car maker has shown a poor show in growth, which has brought an alteration in the car market scenario.
Tata Motors- the largest automobile manufacturing company, appeared to be troubled, as it saw its sale go down by 9%.Even its small car Tata Nano, which was hyped, saw a dip to 6515 units from over 10,000 units sold in the last month.
However, gains in Hyundai-the largest Indian car exporter, were moderately healthier with over 14% growth in sales in May 2011 as compared to 15.5% leap registered in May 2010.
Mayank Pareek, Managing Executive Officer (sales & marketing) at Maruti Suzuki, said interest rates and fuel prices were hitting demand badly. "So despite having a 23% increase in inquiries at dealerships, sales have managed to grow only 4%."Pareek said while the car industry did anticipate sales to moderate, the slowdown was more than predictable due to a variety of negatives. "This is bad, and we have a bad Indian summer.”
Economists say higher interest rates would further dissuade companies from escalating capacity and may result in modest growth in factory output.