Auto manufacturers in India adopt various tactics to handle slowdown

Recurrent hike in interest rates and petrol prices coupled with a slowdown of the economy has punctured to growth of the Indian car industry. Cars in general, and petrol variants in particular have seen a steep drop in demand in recent months posing all sorts of challenges to auto manufacturers.Piling inventory, drop in profits, inability to meet targets have all contributed to a rather dismal picture in the auto sector.

This scenario shows no signs of improving in the near future and hence automakers will have to find a solution to their problems instead of waiting for markets to improve and compounding difficulties they are already facing. Auto manufacturers are presently banking on sales of diesel vehicles to solve their problems temporarily but how long this bubble will last before diesel prices are increased or diese car buyers are required to pay an added tax is to be seen. With great disparity in petrol and diesel prices, customers are showing more affinity to diesel cars but this is not a long term answer to the auto industry which is in a slow down mode.

Volkswagen India have announced launch of their 1.4 litre Jetta TSI only recently. These petrol versions are available in price range from Rs.13.6 lakhs to Rs.15.07 lakhs and will be aviable for purchase early next month. These vehicles offer fuel efficiency of 14.7 km per liter and the company claims that they are vehicles offering value for money. However once these cars are launched it remains to be seen how much of an attraction they will pose to Indian buyers and whether they will entice the customer back into showrooms. The same holds true for all current petrol launches because buying patterns are now resulting in car sales decline rates for many a manufacturer.