Is the year 2011 as bad as it seems for Auto Industry?

The year 2011 is better forgotten than worth remembering. There are some car manufacturers like Mahindra and Mahindra on the domestic front and the OEMs like Toyota who rejoiced despite an especially slow year for the car industry, on an overall the year is cursed, is the underlying verdict. Maruti Suzuki India, Honda Motors and General Motors are among the ill-fated lot to see a huge downside in sales accounting for an overall slowdown in car market.

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The reasons are ample if you start looking at them. The constant price revisions on petrol price taking the gap between the diesel and petrol to Rs 30 from Rs 10 ever since it was decontrolled in 2010. Then it is the RBI’s turn to strike back right when the car market was undergoing an especially harrowing time with 13 interest rate revisions.  While this is the general scenario faced by almost all the car manufacturers, the MSI, GM India and Honda Motors come under the special category where they have their own private problems leading to car market slowdown apart from denting their own car sales.

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Maruti India which was affected by three strikes during 2011 has incurred the majority of loss with 50,000 units of hampered production translating to Rs 2,000 crore monetary loss. The company till date faces the after affects where its flagship model Maruti Swift diesel variant stands at a waiting period of around 6-9 months. The company had to literally halt the production of the models like Maruti Alto, Maruti A-Star and SX4 sedan which are rolled out from the Manesar plant where the labour unrest actually struck. The GM India also faced a similar turn of events with a 50 day loss in production.

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The Honda Motors story is entirely different though nobody could have controlled the eventuality. The Thailand floods have caused the auto major to pause the Honda Brio production while rolling out the Honda Jazz in minimal numbers. On the other hand, there are couple of manufacturers who managed to beat the slowdown. Hyundai India not only came up with its trump card Hyundai EON but sought a positive approach from the grim conditions. The auto major found this as an opportunity to cash on their export abilities.

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