{"id":51251,"date":"2019-08-14T19:00:38","date_gmt":"2019-08-14T13:30:38","guid":{"rendered":"https:\/\/blogadmin.forumias.com\/?p=51251"},"modified":"2019-08-14T15:39:50","modified_gmt":"2019-08-14T10:09:50","slug":"7-pm-whats-ailing-indias-automobile-market-14-august-2019","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/7-pm-whats-ailing-indias-automobile-market-14-august-2019\/","title":{"rendered":"7 PM | What\u2019s ailing India\u2019s automobile market | 14 August, 2019"},"content":{"rendered":"\n<p><strong>Context:<\/strong> Problems\nfacing by automobile industry<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>The Indian automotive industry has\nemerged as a &#8216;sunrise sector&#8217; in the Indian economy. India is emerging as one\nof the world&#8217;s fastest growing passenger car markets and second largest two\nwheeler manufacturer. <\/li><li>It is also home for the largest motor\ncycle manufacturer and fifth largest commercial vehicle manufacturer. India is\nemerging as an export hub for sports utility vehicles (SUVs).<\/li><\/ul>\n\n\n\n<p><strong>&nbsp;Structural problems facing by automobile\nindustry in India:<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>Poor\nroad infrastructure:<\/strong> Amongst the many issues facing the\nIndian automotive industry, the biggest by far is the poor road infrastructure.\n<\/li><li>India&#8217;s road network, comprising of a\nmodest national highway system (that is only 2% or less of the total roadway\nlength) is unhappily and decrepit, and can barely keep pace with the auto\nindustry&#8217;s rapid growth.<\/li><li><strong>Need\nfor innovation:<\/strong> The competitiveness in the sector will largely\ndepend on the capacities of the industries to innovate and upgrade. But the\nproductivity and capacity utilization are the prime determinants of the\ncompetitiveness and influence the national per capita income. But in India the\nper capita income is low to reap the benefits<\/li><li>Increasing Competition &amp; WTO Regime,\nCyclicality of businesses, Increasing Customization &amp; Application\nProliferation Accelerated Infrastructure development Stiff Emission &amp; Other\nRegulatory changes.<\/li><li>Operating Cost Pressures Increased\nCustomer awareness Accelerated Technology up gradation requirements &amp; other\nChange needs Competition from alternative modes like so many challenges facing\nby automotive industry in India<\/li><li><strong>Consumer\nsentiment index:<\/strong> Customer Sentiment Index, 12 month rolling average\nof the Index historical low. The end customers are very important to ensure the\nsurvival of the Motor Vehicle Manufacturing industry.<\/li><li>&nbsp;Economic downturns and other events can affect\nthe expenditure decision of households. When customers are not happy or\noptimistic about the future of the economy, they will tend to postpone\nexpenditure until times are better.<\/li><li><strong>Domestic\ngoods price metal\/ iron and steel:<\/strong> Steel is a major input used when\nmanufacturing a motor vehicle. Rises in the price of steel puts cost pressures\non manufacturers, which often leads to a fall in profitability. <\/li><li>Over the past five years, the price of steel\nhas been rising rapidly. These rises in price eventually pass from the\nmanufacturers to the end customers.<\/li><li><strong>Import\nand export taxes:<\/strong> Over the last few years India s tariff\npolicies and conditions of import of vehicles have served the purpose of\nattracting investments. <\/li><li>Industry is keen that the existing\ntariff structure roadmap and conditions of import of vehicles are retained\nwithout any modifications because of certain systematic deficiencies which make\nmanufacturing less cost competitive in India as compared to some of the neighboring\ncountries like China, Thailand, Indonesia, etc<\/li><li><strong>World\nprice energy\/ crude oil:<\/strong> The hike or the effect of increasing\nprices of crude oil at world level per barrel will affect the market scenario\nof the Automobile industry adversely. The price of oil and petrol affect the\ndriving habits of consumers and the type of car they buy.<\/li><\/ul>\n\n\n\n<p><strong>Present\ncontemporary challenges facing by automotive industry:<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>Technological paradigm:<\/strong> The fundamental technological paradigm it relies\non, volume production, has become progressively more unprofitable in the face\nof increasingly segmented niche markets.<\/li><li><strong>Environmental concerns:<\/strong>\nThe\nregulatory focus on greenhouse gas emissions, as well as the increasingly tight\nregulations on air pollutants, is creating pressure for automakers to reduce\nfuel consumption, as well as emissions from internal combustion engines. The\ntrend is moving towards developing drive trains based on new technologies such\nas hybrids and fuel cells.<\/li><\/ul>\n\n\n\n<p><strong>Measures to tackle slowdown of automotive industry:<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>Government initiatives:<\/strong>\nThrough the Automotive Mission Plan, the National Electric Mobility Mission\nPlan (NEMMP), and other initiatives, the government seeks to achieve two\nobjectives-facilitate long-term growth in the industry and reduce emissions and\noil dependence.<\/li><li><strong>Manufacturing hub:<\/strong>\nThe World Economic Forum ranks India 30th on the\nglobal manufacturing index, which assesses the manufacturing capabilities of\nmore than 100 countries. <\/li><li>The\ngovernment\u2019s \u201cMake in India\u201d initiative has played an important role in\nelevating country\u2019s position. In the past three to four years, India improved\non nine out of ten parameters for ease of doing business.<\/li><li><strong>Tax incentives:<\/strong> Tax breaks will\nresult in higher disposable income among the middle class that should translate\ninto higher spending. This will increase the demand for two-wheelers and\ntractors.<\/li><li>Latest data from the RBI shows that the personal vehicle loan\nportfolio made up by cars and two-wheeler loans grew 6.5% in fiscal 2018-19 as\nagainst 11.3% in the previous fiscal.&nbsp;So government should promote retail\nloan business to promote vehicle purchases.<\/li><\/ul>\n\n\n\n<p><strong>Way forward: <\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>Easier and faster mobility of people and\ngoods across the regions, countries and continents is a cherished yearning of\nmankind. The automobile industry s potential for facilitating this mobility is\nenormous. <\/li><li>Wheels of development across the globe\nwould have to be powered by this industry. However, a seamless development of\nthis industry across countries and continents alone will help in realization of\nthis objective.<\/li><li>For such seamless and barrier-free\ndevelopment of the sector, countries will have to come together and develop\nbetter understanding. Industry across countries will have to meet challenges of\nnewer technologies, alternative fuels and affordability of automobiles by people\nat large through constructive cooperation. <\/li><li>A market trend is growing at a faster\nrate. The opening of the Indian automobile market for foreign companies the\ncompetition is expected to enhance further. The opportunities can be grabbed\nthrough the diversification of export basket in untouched foreign destinations.<\/li><\/ul>\n\n\n\n<p>Source: <a href=\"https:\/\/www.livemint.com\/opinion\/online-views\/what-s-ailing-india-s-automobile-market-1565721140838.html\">https:\/\/www.livemint.com\/opinion\/online-views\/what-s-ailing-india-s-automobile-market-1565721140838.html<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Context: Problems facing by automobile industry The Indian automotive industry has emerged as a &#8216;sunrise sector&#8217; in the Indian economy. India is emerging as one of the world&#8217;s fastest growing passenger car markets and second largest two wheeler manufacturer. It is also home for the largest motor cycle manufacturer and fifth largest commercial vehicle manufacturer.&hellip; <a class=\"more-link\" href=\"https:\/\/forumias.com\/blog\/7-pm-whats-ailing-indias-automobile-market-14-august-2019\/\">Continue reading <span class=\"screen-reader-text\">7 PM | What\u2019s ailing India\u2019s automobile market | 14 August, 2019<\/span><\/a><\/p>\n","protected":false},"author":61,"featured_media":49370,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[130,9],"tags":[],"class_list":["post-51251","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-7-pm","category-public","entry"],"jetpack_featured_media_url":"https:\/\/i0.wp.com\/forumias.com\/blog\/wp-content\/uploads\/2019\/07\/7-PM.png?fit=1000%2C500&ssl=1","views":{"total":0,"cached_at":"","cached_date":1704765843},"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/51251","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"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=51251"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/51251\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media\/49370"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=51251"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=51251"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=51251"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}