{"id":51531,"date":"2019-08-23T17:41:58","date_gmt":"2019-08-23T12:11:58","guid":{"rendered":"https:\/\/blogadmin.forumias.com\/?page_id=51531"},"modified":"2019-08-23T17:42:06","modified_gmt":"2019-08-23T12:12:06","slug":"answered-auto-industries-in-india-are-facing-negative-growth-from-a-long-time-discuss-various-reasons-for-it-and-give-some-solutions","status":"publish","type":"page","link":"https:\/\/forumias.com\/blog\/answered-auto-industries-in-india-are-facing-negative-growth-from-a-long-time-discuss-various-reasons-for-it-and-give-some-solutions\/","title":{"rendered":"[Answered] \u201cAuto-industries in India are facing negative growth from a long time\u201d Discuss various reasons for it and give some solutions."},"content":{"rendered":"\n
Demand of the question<\/strong>
Introduction.<\/strong> Contextual Introduction.
Body. <\/strong>Reasons for poor performance of automobile sector.
Conclusion. <\/strong>Way forward. <\/td><\/tr><\/tbody><\/table>\n\n\n\n

Boosting India’s economic expansion and creating employment opportunities for millions of youth is one of the major challenges India facing. Make in India was a flagship economic initiative that aimed to transform the country into a global manufacturing hub and, in the process, generate jobs especially through automobile sector. Due to various challenges, automobile sector is undergoing a slowdown. <\/p>\n\n\n\n

Reasons for poor performance of\nautomobile sector:<\/strong><\/p>\n\n\n\n

  1. Economic slowdown: <\/strong>The auto sector slowdown is due to\nweakening economic growth and a liquidity crunch. Weak economic activity,\ncoupled with escalating global trade tensions, led this slow down.<\/li>
  2. Lack of credit: <\/strong>Financial crunch brought by a\ncollapse of some non-banking financial companies that used to account for a\nsignificant share of automobile financing. Some banks and NBFCs as a\nresult of bad loans and weak retail sales have decided to enforce stricter\nrestrictions. These restrictions include giving out loans only to people with a\nhigh credit rating. This has majorly affected auto dealers and customers.<\/strong><\/li>
  3. Rise in prices: <\/strong>Automakers are also struggling to\ncomply with a host of new environmental and safety policies, which have\nprompted a hike in vehicle prices, which in turn puts pressure on sales. <\/li>
  4. Lack of investment: <\/strong>The subdued demand, recent\ninvestments made for transition from BSIV to BSVI, and a lack of clarity on\npolicy for electrification of vehicles, has left the industry unsure of its\nfuture and has caused it to stop all future investments. Due to less\ndemand, manufacturers are also having to cut down on production. <\/strong><\/li>
  5. The Rise Of Ride-share Services: <\/strong>Over the\npast years, there is rapid rise of ride-share apps like OLA, Uber in the\ncountry. This has thus affected sales. It has made customers hesitant to buy a\nvehicle as much of their expenses are reduced with regular carpool use. <\/li>
  6. India\u2019s Rushed EV Plan:<\/strong> The Indian\ngovernment has envisioned a radical push for all vehicles to go fully electric\nby 2030. Due to this EV roadmap, customers have fears that any vehicle that\nthey purchase could potentially become obsolete in the next decade or so. Thus\nthey are holding on to their current vehicles purchase in order to avoid an\nunnecessary purchase if EVs are on the way. This is affecting sales in the\nautomobile industry.<\/li>
  7. Overcrowding:<\/strong> Due to the growth in the\nautomotive industry in the past decade, more customers were able to purchase\nvehicles of their own. However, this turned out to be a double-edged sword as\nmore vehicle sales has led to an explosion of vehicles on the roads today. This\nhas led to an immense amount of bottlenecks and traffic jams on our outdated\nroads. With public transport expansion like metro, customers are hesitating to\nbuy vehicles in order to escape traffic snarls.<\/li>
  8. Miscellaneous Factors:<\/strong> Higher and\nnon-standard road taxes, have led to auto-makers to increase prices of\nvehicles. Apart from this, the GST on automotive parts and vehicles has also\nadded to the woes of the industry. This has eventually led to customers shying\naway from buying these vehicles and a downturn in sales.<\/li><\/ol>\n\n\n\n

    Indian automotive industry\u2019s decline is catastrophic. If major corrective steps are not taken we could see the beginning of a major recession in the world\u2019s 4th<\/sup> largest automotive market. Major reforms and incentives are needed to pull the industry out of this slowdown. <\/p>\n","protected":false},"excerpt":{"rendered":"

    Demand of the question Introduction. Contextual Introduction. Body. Reasons for poor performance of automobile sector. Conclusion. Way forward. Boosting India’s economic expansion and creating employment opportunities for millions of youth is one of the major challenges India facing. Make in India was a flagship economic initiative that aimed to transform the country into a global… Continue reading [Answered] \u201cAuto-industries in India are facing negative growth from a long time\u201d Discuss various reasons for it and give some solutions.<\/span><\/a><\/p>\n","protected":false},"author":61,"featured_media":49132,"parent":0,"menu_order":0,"comment_status":"open","ping_status":"closed","template":"","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"class_list":["post-51531","page","type-page","status-publish","has-post-thumbnail","hentry","entry"],"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/pages\/51531","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/pages"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/page"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/61"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=51531"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/pages\/51531\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media\/49132"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=51531"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}