Indian auto industry may feel heat until early FY’13

Standing left to right – Mr. Dinesh Jebamani (Chief Manager Liability Product Management and New Age Media – Seylan Bank), Mr.Sudesh Peiris (Senior Manager – Digital Banking Channels – Seylan Bank), Ms. S.Senevirathne (Representative of the Revenue Department – Western Province), Mr. Tilan Wijeyesekera (Deputy General Manager – Retail Banking – Seylan Bank) and Mr. Malik Wickremanayaka (Deputy General Manager – Operations – Seylan Bank)

NEW DELHI, (Asia Pulse) – The Indian auto industry may continue to face tough times till the first quarter of 2012-13 as firms are expected to hike car prices by up to 10 per cent, resulting in reduced demand, a study has said. “The hike in car prices would mainly be driven by high interest rates, rising raw material cost coupled with labour pangs,” said the Assocham study.

The hike in product cost would lower car sales.

From January to November, car sales shrank four per cent over the same period last year, Assocham Secretary General D.S Rawat said.

The industry can hike prices as it has been giving huge discounts to woo customers and moderate sales this year, he added.

“Besides, global disturbances in the US, sovereign debt crisis in the Eurozone, sluggish economic growth in Japan and a slowing Chinese economy are other significant reasons due to which automakers in India have been finding it difficult to keep their margins intact,” Rawat said.

The chamber interacted with nearly 50 experts from the industry, including leading automobile manufacturers, dealers, auto-parts traders and analysts across cities like Ahmedabad, Bangalore, Delhi-NCR, Mumbai and Pune.

The industry body suggested that auto