News / Asia

India’s Auto Industry Hit Hard by Lagging Economy

India’s Auto Industry Hit Hard by Lagging Economyi
X
March 27, 2013
In India, car sales are expected to fall for the first time in nearly a decade. VOA's Aru Pande has more on how India's slowing economy is hurting an auto industry that was once a top choice for global companies looking to expand.

India’s Auto Industry Hit Hard by Lagging Economy

TEXT SIZE - +
Aru Pande
— In India, car sales are expected to fall for the first time in nearly a decade.  India's slowing economy is hurting an auto industry that was once a top choice for global companies looking to expand.

New Delhi resident Rajesh Kumar could not think of a better time to replace his 10-year old Hyundai Santro.

"The price is right, the sales people are also very good. And I am buying a car this month because it’s the [Hindu] religious festival of Navatri," he said.

For those in the market for a new car in India, this could not be a better time, as dealers are offering discounts to get people in the door.

Sales in the world’s second fastest growing automotive market are expected to post their first annual decline since 2003.

The Society of Indian Automobile Manufacturers says the industry will miss all growth targets this year, noting that the sale of passenger cars was down 12 percent in January compared to the same period last year.

Sharad Mehra owns four auto dealerships in and around New Delhi, including this Hyundai showroom in Gurgaon.  He says the stagnant market has his employees working harder for a sale.

"Earlier, what used to happen is we used to sit in the showrooms and wait for customers to come in, walk in - we used to try to convert that.  But now, they [sales people] are all trying to go out, go and reach the customer. The customer gives a call, we try to go out to him," he said.

Rajiv Kumar, with India’s Center for Policy Research, says the steep fall in car sales reflects the frustration and despondency of those most affected by India’s slumping economy. 

He says people are finding it harder to make aspirational purchases, including upgrading from owning a motorcycle to a car.

"As long as your car sales were growing, it represented the growth of that middle class and its aspirations and the fact that it could meet those aspirations," he said.  "Now it’s not happening," he said.

Analysts say the economy’s effect on the auto industry is far-reaching.  Major foreign automakers, like Ford, Suzuki, and Hyundai, have invested billions to build up operations in India and are now having to reassess their growth models.

Domestic manufacturers of auto parts are looking outside India for business, and steel companies are also feeling the pinch.

With interest rates at more than 12 percent, dealers and customers like Rajesh Kumar say the government can take steps to help bring sales back up.

"The government keeps increasing the interest rate, if they reduce it a little bit, then the public will benefit and more people will buy cars," he said.

While automakers wait for urban sales to recover, many are looking to take advantage of what many see as India’s untapped rural sector.

You May Like

Algerians Vote in Presidential Election

There were few media reports of protests and clashes around the country, but so far no significant violence More

Sharks More Evolved than Previously Thought

The discovery could “profoundly affect our understanding of evolutionary history” More

Pakistan Military Asked to Protect Polio Workers

Request comes as authorities say a Taliban ban on vaccinations in 2012 and deadly attacks on anti-polio teams have prevented thousands of children from getting inoculated More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Google Buys Drone Companyi
|| 0:00:00
...
 
🔇
X
George Putic
April 15, 2014
In its latest purchase of high-tech companies, Google has acquired a manufacturer of solar-powered drones that can stay in the air almost indefinitely, relaying broadband Internet connection to remote areas. It is seen as yet another step in the U.S. based Web giant’s bid to bring Internet to the whole world. VOA’s George Putic reports.
Video

Video Google Buys Drone Company

In its latest purchase of high-tech companies, Google has acquired a manufacturer of solar-powered drones that can stay in the air almost indefinitely, relaying broadband Internet connection to remote areas. It is seen as yet another step in the U.S. based Web giant’s bid to bring Internet to the whole world. VOA’s George Putic reports.
Video

Video Ray Bonneville Sings the Blues and More on New CD

Singer/songwriter Ray Bonneville has released a new CD called “Easy Gone” with music that reflects his musical and personal journey from French-speaking Canada to his current home in Austin,Texas. The eclectic artist’s fan base extends from Texas to various parts of North America and Europe. VOA’s Greg Flakus reports from Austin.
Video

Video Millions Labor in Pakistan's Informal Economy

The World Bank says that in Pakistan, roughly 70 percent work in the so-called informal sector, a part of the economy that is unregulated and untaxed. VOA's Sharon Behn reports from Islamabad on how the informal sector impact's the Pakistani economy.
Video

Video Passover Celebrates Liberation from Bondage

Jewish people around the world are celebrating Passover, a commemoration of their liberation from slavery in Egypt more than 3,300 years ago. According to scripture, God helped the Jews, led by Moses, escape bondage in Egypt and cross the Red Sea into the desert. Zlatica Hoke reports that the story of the Jewish Exodus resonates with other people trying to escape slave-like conditions.
Video

Video Police Pursue Hate Crime Charges Against Kansas Shooting Suspect

Prosecutors are sifting through the evidence in the wake of Sunday’s shootings in a suburb of Kansas City, Missouri that left three people dead. A suspect in the shootings taken into custody is a white supremacist. As VOA’s Kane Farabaugh reports, he was well-known to law enforcement agencies and human rights groups alike.
Video

Video In Eastern Ukraine, Pro-unity Activists Emerge from Shadows

Amid the pro-Russian uprisings in eastern Ukraine, there is a large body of activists who support Ukrainian unity and reject Russian intervention. Their activities have remained largely underground, but they are preparing to take on their pro-Moscow opponents, as Henry Ridgwell reports from the eastern city of Donetsk.
Video

Video Basket Maker’s Skills Have World Reach

A prestigious craft show in the U.S. capital offers one-of-a-kind creations by more than 120 artists working in a variety of media. As VOA’s Julie Taboh reports from Washington, one artist lucky enough to be selected says sharing her skills with women overseas is just as significant.
Video

Video UN Report Urges Speedier Action to Avoid Climate Disaster

A new United Nations report says the world must switch from fossil fuels to cleaner energy sources to control the effects of climate change. The Intergovernmental Panel on Climate Change released the report (Sunday) following a meeting of scientists and government representatives in Berlin. The comprehensive review follows two recent IPCC reports that detail the certainty of climate change, its impacts and in this most recent report what to do about it. VOA’s Rosanne Skirble has the details.
AppleAndroid