Auto India, Car India

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Increasing prices are generally something that auto makers welcome but not in India. Recently, in the month of April there are a few Indian auto makers who were struggling for producing the great collection of cars for fulfilling the demand since sales hit successive monthly highs. Around the entire auto industry, sales of cars fell almost 16 percent in the month of July rather than the last year and 10 percent in the month of August. Decline in the month of September was a comparatively mild 1.4 percent and according to the Society of Indian Automobile Manufacturers even if sales number are getting distorted in 3 months to November by the festival season, if purchasers open their wallets.

It is forecasted by the SIAM, India’s auto-industry lobby that sales growth will slow down to nearly 2 percent to 4 percent for the year that ends in the month of April. It means the slowdown will be almost one-tenth of what it was previous year. Price rises is a key factor. Consumer prices are increasing minimum to 20 percent and since it becomes very tough to pay energy bills, flexible spending on a newly launched car is bound to fall over down the list of household priorities.

Increasing bank interest rates have made the matters worse for auto sales. Bank interest rates have reached almost multi-year highs. There is increase in lending rates almost 2.5 percentage points in the previous year, sending car charge payments up too. Around the industry, share prices are also holding up. Auto Index of The Bombay Stock Exchange is down to 0.7 percent since the month of August, if the comparison is done with a 9 percent drop in huge markets.

Tata Motors Company is getting 70 percent income from commercial vehicles. They are also getting revenue from the sales of both tractors and trucks. It has been estimated by the SIAM that truck sales can be up 13 percent to 15 percent this year. A few auto makers can fare well as compared to their rivals.

Among auto industries, Maruti Suzuki India will suffer more that deals nearly in passenger vehicles. The share price of Maruti is down to 11.7 percent since the month of August. Its gaining could fall to 34 percent from a year earlier in the July-September quarter, Motilal Oswal Securities said.

On the whole, there is much scope for auto industry of India to grow. According to J. D Power Asia Pacific Forecasting, Annual sales must double in India to 3.6 million by the year 2015. In time, middle class is going to purchase more cars to fit their more and more rich lifestyles.