Screeching Auto Market in India

Everything is not good with the auto industry in India, as the market has registered skid in the January sales. So as the shareholder of the auto companies are in puzzle to see what could be there for this industry in the forthcoming union budget.

The sales were down in January, and the major reasons could be - the hike in the petrol price, diesel deregulation and non-introduction of any new model or variety in the market.

In 2012, only Maruti had good sales in the small cars segments, according to media reports. The auto companies have been approaching for the government to look after the excise duty and possible cut in that which could save the industry from shrinking further due to the global slowdown.

The major auto company, TATA reportedly cut down its production of cars following the slowdown and slow sales figures in India. Now, the companies have expectation from the union budget, which could possible give some relief as the government had deregulated the diesel and hiked petrol price many times in past.

The impact of hike in the petrol and diesel was loud and clear on the auto industry – slashing the sales, which has been considered as major concern for the car industries and the share holders of the auto market.

However, the apex bank has brought down the key interest rates to help the economy, but further measures need to keep the interest of all the industries in the country.

Due to the slowdown, slow growth rate of the economy and high inflation the choice of customers have been very dynamic and shifted their preferences towards basic necessity and cutting down luxurious goods.

And that could be another major impact on the auto market and the hike in the car prices also check the peace of the auto sales in India.

The post budget time may be favourable for both auto industry and consumers, if the government decided to cut excise duty in the budget.