The Indian automobile industry has been going through a low phase since the past 10 months and experts believe that situation is going to sustain in the current financial year that ends in March 2014. Demands continue to remain low as against the expectations of the Indian auto makers, due to the crisis in the economy, increase in fuel prices and loan rates. Until few years ago, this industry boomed with sales but the falling value of Indian rupee is only bringing its depreciation.
The total car sales climbed up to 15.4 per cent in the month of August that helped lift the domestic automobile industry out the decline territory. Maruti Suzuki observed a rise of 51 per cent in its sales after the shut down of the company's Manesar plant. However, this rise for a certain span of time wasn't helpful in covering up the loss the market had been going through. The sales of vans fell by 19 per cent and 13 per cent for utility vehicles. The sales figures of hatchbacks have also been low since the past ten months and a small increase wouldn't be able to help counter the situation in the long run. Experts feel that the situation of the market would remain poor in the coming year as well and a one-time jump can not influence the whole year's performance.
All major automobile companies like Mahindra & Mahindra, Tata Motors, Toyota have felt the heat of the economic crisis. Since Ford and Honda launched some new models in the past months, they have been able to control the situation. Honda India's Vice President said that their sedan, Amaze is in constant demand and expected to be sold out for the next three months. Notably, there has been a rise in the two wheeler segment of auto-industry, 4 per cent rise in motorbike sales and 21 per cent growth rate in scooters, resulting in a 7 per cent overall growth rate.
The falling rupee has shown its impact everywhere with a lot of companies shutting down their plants or cutting down on their staff. Maruti Suzuki is compromising on its temporary employees and has stopped recruiting altogether. The automobile industry is witnessing a lot of stock pile up with auto makers have begun to operate below their capacity. Sources say that Mahindra & Mahindra is said to have cut down on as much as 1000 contract and temporary workers in the recent past. They also have plans to observe as high as six 'no production' days every month at their production plants.
Now that the festive season is round the corner, all the companies have pinned their hopes to this period which stretches till the end of the year. This is the time when maximum sales take place and in order to cash in on the situation, every auto maker is coming up with new models to launch. Nissan, Volkswagen, Maruti Suzuki and Tata Motors are either coming up with new or upgraded versions of models already present in the market but the continuous fall of the rupee is a matter of concern for everyone. The month of August recorded the lowest value in the past two decades. Automobile dealers feel that its high time that the government takes some action so that they do not lose on to the sales figure in the most fruitful time period. As of now, there hasn't been a hike in the prices of these cars but some foreign auto makers have intentions to raise prices and it is likely that the rest will follow suit. Industry experts believe that it isn't easy to avoid a hike as even these companies need to shield the high impact of the depreciating economy. In the Asian region, India and Indonesia are two countries that have been affected the most and their automobile industry are facing the highest burden of the same.
