The Indian economy is in doldrums and slowing drastically. No end of interest cut by the Reserve Bank or pep talk by the growth gurus has any effect on the GDP which is still showing a tendency to point downwards. It is estimated that this year the growth would be only 5 per cent, unless an unlikely miracle takes place. Be prepared to face a slow down and very weak growth, pray for a miracle or intervention by the divine power. Along with the slowing economy in the country the car manufacturing industry is facing a dismal future as sales went down drastically in February of this year. The sales have gown down to a nearly 25.7%. It is a well known fact that all major manufacturers are thinking of cutting down the production. Some units have asked their workers to work for less days in a week as a measure of cutting costs.
If we take a look at the sales figures of February and compare them to the sales figures in February 2012, we realize that this is not a script from a bad movie but a reality which everyone connected with the car industry need to read and understand. Last year the figures showed sale of 213.362 units while this year the sales figure for the same month is 158.513. Only the year 2000 saw such a dismal sale figure. The reasons for the dismal sales were very clearly explained by Mr. S. Sen, Dy. Director General of SIAMs (“Society of Indian Automobile Manufacturers”). He said a steep hike in oil prices, high interest rates and fear of further slowing down of economy has made people nervous and they tend to hold on to the precious saving. As a result they stop buying luxury items like cars. He further added that high taxes on Sports Utility Vehicles in the Federal Budget have further aggravated a bad situation.
Taking all these factors into consideration it is very difficult to envisage high sales this year and it would be feasible for the manufacturers to cut down their production till the economy recovers.