Global recession hits Indian auto industry
Global recession has devastated the global auto industry with
pinching effects on the Indian auto industry. India is a strong and
growing economy but the hit of recession has put red marks on the entire
balance sheet of the Indian economy.
Among the leading car manufacturers, General Motors and Ford were the
first one to file for bankruptcy. GM is struggling to stay alive and
claims that the company has just enough cash to continue its operations.
Even the merger talks of GM and Global Recession Hits Indian Auto
Industry Chrysler have been officially brought to a halt because of the
liquidity crunch.
U.S sales have fallen down by 32% which has directly affected the
Indian car industry where GM has recorded a fall of 45%, Ford of 30% and
Chrysler down by 35%. All the three major car manufacturers have
reported declined growth after the hit of recession.
After the industry experienced a heavy fall in the month of August
due to inflation, September proved to be a promising month with things
setting out at the right place. Then again the market went in the
negative terrain swayed by the wind of recession.
October usually is considered to be the best month for car sales
because of the festive season. Unfortunately, this year it proved to be
a curse for the Indian auto industry. At one end of the spectrum, car
manufacturers like Tata Motors, GM, Hyundai, Ford, Renault, Mahindra,
and Maruti Suzuki are investing huge amounts to establish new production
plants and line up launch of car models. At the other end of the
spectrum, SIAM has cut down the growth forecast of automotive sales from
12.5% to 9.5%. This initiative taken by SIAM further forced few car
manufacturers like Tata Motors and Maruti Suzuki to cut down their
production which further took away the job of almost 300 workers. Even
Mahindra-Renault reduced the number of production units of their Logan.
In addition, the severe liquidity crunch in the U.S market has also
forced many of the car buyers to cut upgrades to bigger cars and many
are pushed back from buying new cars.
With deteriorating car sales, even production has gone down to a
great extent, which has eventually put a negative impact on the auto
component industry. (courtesy. www.associatedcontent.com) |