After a period of sluggish sales and dipping revenues, things are looking promising for the global auto industry. As a part of the BRIC block, Indian and Chinese auto markets are also facing an upswing with Indian automobile market showing a 7 per cent rise in its car sales in July 2012, under the review of sales recorded in year-ago period.
Starting from July this year, the Indian auto industry looks promising for the remaining part of calendar year with the launch of many vehicles spanning across various segments. On the other hand, the motorcycle market lags a little with sales down to 5 per cent; however on a cumulative approach, the two-wheeler sales surged by 7.5 per cent.
Industry experts have assured that the market will see its peak during the festive season, which will start from October 2012. The lockout at Maruti Suzuki's Manesar plant will also significantly impact the consolidated auto sales, as pointed out by the analysts. On a nice note, the Manesar facility has resumed its operations at about 10 per cent of its average productivity and on this, industry experts have even expressed their doubts over the company’s decision to roll out 150 cars a day.
Analysts have also pointed out that the ever rising fuel prices could pose some threat for the auto industry. On a light vein, they expressed that if the banks follow their suit of lowering auto loan rates, similar to that with home loans, auto market could boom even further.
Coming to the global automobile scene, the situation too seems to be striking the right chords, Europe being an exception, with a 6 per cent consolidated growth in the first six months of 2012. The auto markets of the PIGS countries, comprising Portugal, Italy, Greece and Spain, bore the brunt of recession and dragged down the overall auto industry sales.
Japan seems to be responding well with rising demands of vehicles after the last year's tsunami horror. Japanese automotive market grew by 50 per cent putting it on top of the world's most rapidly growing auto market chart. Out of the BRIC countries, the Russian auto market is the strongest, which expanded 30 per cent and took the second spot. However, auto experts are rejoicing at the turnaround of the North American auto markets, comprising USA and Canada, which recorded a new high since 2007.
Reportedly, the resurgence in auto markets of North America and BRIC block will benefit Indian auto companies that export components and vehicles to global Tier-1 vendors and manufacturers.
Interestingly Hyundai, the Korean auto major, has been compensating its sluggish sales in India by exporting its Indian assembled vehicles to other markets. The move ensured that the company's production units based in India kept returning revenues while on the other hand, the production facilities of its competitors sat idle owing to the slack domestic sales. Also many India-based auto majors have started global sourcing of components and assembled vehicles from India, including Ford that exports its cars to South Africa. The decision from the American auto major was quite smart, which fetched great returns for it. Following the league, US-based General Motors looks set to increase its global component export business from India as its home turf recently showed signs of a turnaround after the period of slack growth in its domestic auto market this year.
