The global recession that has struck our world is now peaking. The tide of financial downfall in the U.S. has left no company untouched. Major U.S auto manufacturers that have faced severe financial difficulties include decade old names such as General Motors and Ford.
GM and Ford are at the verge of bankruptcy. Struggling to stay alive, these manufacturers have finally asked for help from their government. How does this affect the Indian auto market?
The heavy loss along with a severe liquidity crunch in the U.S has compelled people to cut upgrades to bigger and better cars. Due to a lack of finance in the market, the number of people buying new cars has almost come to a standstill. With deteriorating car sales, car production has also seen a massive slow down, which means that the demand for auto components is fast dwindling.
Auto players, who use to import car components from the fast growing and cheaper Indian market, have cut down their auto component orders due to the hard hit of recession. Even players like Bajaj Auto, Hyundai Motors, and Tata Motors from India have cut down their component orders.
After a slowdown in August 2008, September proved to be a promising month for the auto industry. Production growth in September 2008 was recorded to be 12.70% with a domestic sales growth of 5.39%. This growth was further swayed away by the strong wind of recession in the month of October. In October, car sales fell down to about 9.05% over October 2007 along with a slowdown in car production that dropped to about 12.32%. Export sales also dipped from various markets, which have taken a stiff beating on the component manufacturers.
Fortunately, the strong and growing Indian economy with its vast working population may have a cushioning effect on the car manufacturers and dealers. However, the auto component manufacturers will hit the hardest during this slow down and the declining sales are likely to continue at least until March 2009.
Labels: Car-Manufacturers, Ford-Cars, General-Motors
0 Comments:
Post a Comment
<< Home