Going by how matters have been in the past year, there is little hope that India’s auto industry will grow beyond the single-digit mark in FY2013-14, even if macroeconomic indicators and economic sentiments improve substantially
Is it any surprise then that every automobile company in India and its third cousin has been making a beeline for the Indian market? Is it any surprise that states like Haryana, Maharashtra, Tamil Nadu and Gujarat are fighting pitched battles to attract automobile companies to their states. Is it any surprise that the quick decision of Narendra Modi to encourage Ratan Tata to relocate his Nano manufacturing plant to Gujarat in the aftermath of Singur added spice and polish to his already glowing halo? And why not since the numbers being bandied about have been so jaw droppingly awesome. The same E&Y study predicted that the size of the Indian auto industry will balloon from $25 billion to $110 billion by 2020; the value of exports will rise from $3.5 billion to $30 billion and the size of the auto components industry too will balloon from $26 billion to more than $110 billion by 2020.
So what happened? Far from maintaining the much touted growth momentum, auto sales have actually crashed in recent months. The decline in sales has been so widespread and so precipitous that 2012-13 is guaranteed to register an actual decline in numbers as compared to the previous year. And hardly anybody seems to have been spared from the onslaught. Hyundai has seen sales falling more than 16% y-o-y in March 2013. Tata Motors has had to suffer the trauma of a more than 60% fall in sales in the same month. The only company that seems to have come up smelling of flowers in the aftermath of his bloodbath is Mahindra & Mahindra, whose gamble on the rising popularity of multi-utility vehicles seems to be paying off.
Is it any surprise then that every automobile company in India and its third cousin has been making a beeline for the Indian market? Is it any surprise that states like Haryana, Maharashtra, Tamil Nadu and Gujarat are fighting pitched battles to attract automobile companies to their states. Is it any surprise that the quick decision of Narendra Modi to encourage Ratan Tata to relocate his Nano manufacturing plant to Gujarat in the aftermath of Singur added spice and polish to his already glowing halo? And why not since the numbers being bandied about have been so jaw droppingly awesome. The same E&Y study predicted that the size of the Indian auto industry will balloon from $25 billion to $110 billion by 2020; the value of exports will rise from $3.5 billion to $30 billion and the size of the auto components industry too will balloon from $26 billion to more than $110 billion by 2020.
So what happened? Far from maintaining the much touted growth momentum, auto sales have actually crashed in recent months. The decline in sales has been so widespread and so precipitous that 2012-13 is guaranteed to register an actual decline in numbers as compared to the previous year. And hardly anybody seems to have been spared from the onslaught. Hyundai has seen sales falling more than 16% y-o-y in March 2013. Tata Motors has had to suffer the trauma of a more than 60% fall in sales in the same month. The only company that seems to have come up smelling of flowers in the aftermath of his bloodbath is Mahindra & Mahindra, whose gamble on the rising popularity of multi-utility vehicles seems to be paying off.
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