Japan Tragedy, RBI Rate Hike Worries Carmakers

The Indian auto industry is going through a rough time. It seems that the challenges are increasing day by day. Along with the increasing raw material prices, few more obstacles have been added to the list. The barriers like key part shortage, is likely to hamper the sales performance for this financial year.

If the auto biggies can share the burden of increased prices with the buyers, the shortcoming of auto parts due to the natural disaster in Japan and Reserve Bank's hike in rates will greatly affect the finance arm in the Indian auto industry.

P Balendran, the Vice President at General Motors confirmed that the Indian auto giant is facing challenges while the industry is ready for this major challenge. As per the industry personals it is a phase which will pass on. He also added that due to the inadequacy of the main parts as they are outsourced from Japan have been greatly hampered due to the devastating earthquake and tsunami. This has in turn become another hurdle for the auto giants. The auto giants who were expecting surge in the sales for this fiscal year are worried with the new developments.

It is quite stringent situation as the sales figures propelled for the present time. A scarcity of vital auto parts such as tyres, steel and casting is difficult to deal with. Later what is predicting low sales figure is the increasing rates on car loans as Reserve Bank of India has raised the rates which will further increase the fiancee on auto mobiles. However, in near future the industry experts do not see any likable solution for the problems. Mahindra & Mahindra the Indian auto mobile brand is quite confident on the long term auto industry potential. While the auto company is expecting a heat up in the current situation due to the natural disaster and RBI hike.

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