Indian Auto sector demand handcuffed due to various reasons

Indian auto market showed an exceptional growth but it looks like it the demand will dip due to various factors such as increasing interest rates, rising fuel prices and accelerating input cost. According to a top industry expert the above stated factors can slow down the pace at around 14 to 15 per cent in 2011 compared to the last years growth rate. The auto industry observed a growth of 23 to 24 per cent in the year 2009 in spite of the global economic slowdown.

A Balendran, Vice-President- Corporate Affairs, General Motors India said that the accelerated input cost clubbed with increasing fuel prices and constant hike in the interest rates is expected to affect the sales.

Speaking on the situation, Mr. A Balendran General Motors India Vice-President, Corporate Affairs,mentioned that the company is not expecting any contraction. However, the sales figures of January 2011 showcases a growth of only 6 per cent by rolling out 9984 cars over 9421 cars in January 2010. Mr Balendran stated that the company assumes that February will exhibit almost the same sales figures.

Market is observing a low time at this point with reasons such as consolidated liquidity, economic slowdown and inflation. These factors will hamper the growth of auto industry by making the auto mobiles costlier.

The crude oil is being the estrange cousin as it has touched $100 per barrel making it expensive for the consumers which is expected to raise further. Maruti Suzuki India has recently showed its concern over the decreasing demand due to the various factors stated above.

Shashank Srivastava, Chief General Manager, Marketing, Maruti Suzuki said that the factors such as high inflation, the interest rate hikes and increasing fuel prices have handcuffed the demand from the consumers. Though he did not usher on the industry growth.

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