News / Asia

India’s Auto Industry Hit Hard by Lagging Economy

India’s Auto Industry Hit Hard by Lagging Economyi
X
March 27, 2013 11:43 AM
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
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

Jihadist Assassin says Goal of Tunisia Murders Was Chaos

Abu Muqatil at-Tunusi’s remarks in a propaganda interview also cast light on attack on Bardo Museum More

Russia Denies License to Tatar-Language TV Station in Crimea

OSCE official says denial shows 'politically selective censorship of free and independent voices in Crimea is continuing' More

Kenyan Startups Tackle Expensive Remittances Through Bitcoin

Some think services could give Western Union a run for its money, though others say it’s still got a long way to go More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Indiana Controversy Highlights Divergent Meanings of Religious Freedomi
X
Jerome Socolovsky
April 01, 2015 1:41 AM
Indiana’s state government has triggered a nationwide controversy by approving a law that critics say is aimed at allowing discrimination against gays and lesbians. The controversy stems from divergent notions of religious freedom in America. VOA's Jerome Socolovsky reports.
Video

Video Indiana Controversy Highlights Divergent Meanings of Religious Freedom

Indiana’s state government has triggered a nationwide controversy by approving a law that critics say is aimed at allowing discrimination against gays and lesbians. The controversy stems from divergent notions of religious freedom in America. VOA's Jerome Socolovsky reports.
Video

Video Nigerians Welcome Buhari's Return to Power

Crowds of jubilant Nigerians nationwide have celebrated the return to power of former military ruler Muhammadu Buhari. The retired army general won this year's presidential election with more than 2 million votes more than incumbent President Goodluck Jonathan. Buhari's supporters hope he can strengthen the country's economy and security once he takes office in late May. Zlatica Hoke has this story.
Video

Video Report: State of Black America a 'Tale of Two Nations'

The National Urban League has described this year's "State of Black America" report as a "tale of two nations." The group's annual report, released earlier this month (March), found that under an equality index African Americans had only 72% parity compared to whites in areas such as education, economics, health, social justice and civic engagement. It’s a gap that educators and students at Brooklyn’s Medgar Evers College are looking to close. VOA's Daniela Schrier reports from the school.
Video

Video Film Tells Story of Musicians in Mali Threatened by Jihadists

At this year's annual South by Southwest film and music festival in Austin, Texas, some musicians from Mali were on hand to promote a film about how their lives were upturned by jihadists who destroyed ancient treasures in the city of Timbuktu and prohibited anyone from playing music under threat of death. As VOA’s Greg Flakus reports from Austin, some are afraid to return to their hometowns even though the jihadists are no longer in control there.
Video

Video Gamma Ray Observatory to Open Soon in Mexico

American and Mexican scientists have completed construction of the world's largest gamma ray observatory, situated high in central Mexico’s Sierra Negra Mountain. The observatory's huge array of water-based detectors will soon start discovering secrets about black holes and supernovas. VOA’s George Putic reports.
Video

Video Ebola Vaccine Trials Underway in West Africa

Ebola has claimed the lives of more than 10,000 people in West Africa. Since last summer, researchers have rushed to get anti-Ebola vaccines into clinical trials. While it's too early to say that any of the potential vaccines work, some scientists say they are seeing strong results from some of the studies. VOA's Carol Pearson reports.
Video

Video Philippines Wants Tourists Spending Money at New Casinos

Tourism is a multi-billion dollar industry in the Philippines. Close to five million foreign visitors traveled there last year, perhaps lured by the country’s tropical beaches. But Jason Strother reports from Manila that the country hopes to entice more travelers to stay indoors and spend money inside new casinos.
Video

Video Civilian Casualties Push Men to Join Rebels in Ukraine

The continued fighting in eastern Ukraine and the shelling of civilian neighborhoods seem to be pushing more men to join the separatist fighters. Many of the new recruits are residents of Ukraine made bitter by new grievances, as well as old. VOA's Patrick Wells reports.
Video

Video Islamic State Prisoners Talk of Curiosity, God, Regret

Islamic State fighter, a prisoner of Kurdish YPG forces, asked his family asking for forgiveness: "I destroyed myself and I destroyed them along with me." The Syrian youth was one of two detainees who spoke to VOA’s Kurdish Service about the path they chose; their names have been changed and identifying details obscured. VOA's Zana Omer reports.
Video

Video Germanwings Findings Raise Issue of Psychological Testing for Pilots

More is being discovered about the co-pilot in the crash of Germanwings Flight 9525 in the French Alps. Investigators say he was hiding a medical condition, raising questions about the mental qualifications of pilots. VOA's Carolyn Presutti reports.
Video

Video Liberia's Almost Last Ebola Patient Grateful but Still Grieving

Beatrice Yardolo was to make history as Liberia’s last Ebola patient. Liberians recently started counting down 42 days, the period that has to go by without a single new infection until the World Health Organization can declare a country Ebola-free. That countdown stopped on March 20 when there was another new case of Ebola, making Yardolo’s story a reminder that Ebola is far from over. Benno Muchler reports from Monrovia.
Video

Video Cambodian Land Grabs Threaten Traditional Communities

Indigenous communities in Cambodia's Ratanakiri province say the government’s economic land concession policy is taking away their land and traditional way of life, making many fear that their identity will soon be lost. Local authorities, though, have denied this is the case. VOA's Say Mony went to investigate and filed this report, narrated by Colin Lovett.

VOA Blogs

Circumventing Censorship

An Internet Primer for Healthy Web Habits

As surveillance and censoring technologies advance, so, too, do new tools for your computer or mobile device that help protect your privacy and break through Internet censorship.
More