Domestic carmakers, facing the biggest slowdown in decade due to increasing interest rates and fuel, are scaling down production to reduce excess stock at dealerships. While the country’s top carmaker Maruti Suzuki is set to end the fiscal with a 10% drop in production, rival Hyundai Motor India is shifting gears to increase exports to reduce stock pile.
Component makers, too, are feeling the heat, with several automakers cutting orders. Rising cost of fuel and loans has kept car buyers away, leading to four consecutive months of negative sales.
In October 2011, sales fell nearly 24%, forcing industry body Society of Indian Automobile Manufacturers to revise its sales growth forecast for the year to 2-4%, from 10-12% in October. This too, say top executives of some car companies, will be tough to meet.
Source: Economic Times
