2012 not a smooth ride for auto industry: Report

BANGALORE: Tough times are likely to persist for the automotive industry in India till the first quarter of 2012-13 as major auto makers are geared up to hike prices by nearly two to ten per cent in the year ahead,  according to the latest ‘Indian Auto Industry: The Year Ahead’ report, prepared by the Associated Chambers of Commerce and Industry (ASSOCHAM). “Rising interest rates, steep and steady rise in input costs, unregulated price hike in raw materials, sudden depreciation of rupee against major currencies together with labour pangs are certain key reasons behind the alarming drop in passenger car sales which shrunk to just over four per cent between January and November and dramatically rose to nearly seven per cent in November,” D S Rawat, Secretary General of the ASSOCHAM, explained.Attributing global disturbances like the slow pace of economic recovery in the United States and a sovereign debt crisis in the Eurozone, the report said, that apart, sluggish economic growth in Japan and a slowing Chinese economy were other significant reasons due to which the automakers in India had been finding it difficult to keep their margins intact.The report also predicted the growth of car sales in the current fiscal to stay about four to five per cent as against nearly 30 per cent in the previous year.Rawat informed that they interacted with nearly 50 experts from the auto industry including the former chiefs of various leading automobile manufacturers, dealers, auto parts’ traders and auto industry analysts across cities like Ahmedabad, Bangalore, Delhi-National Capital Region (NCR), Mumbai and Pune to ascertain their views on the prospects of the auto sector in the year ahead before preparing the report.“Automakers must revise their marketing strategies, launch diesel variants, promote easy availability of finance options to woo the customers and keep a tab on tier II, III cities and the rural areas as these markets are going to spurt the car sales in the recent future,” the ASSOCHAM Secretary General added.