INDIA’S automobile industry may face a sluggish growth in the next three years if one were to go by the projections made by the country’s largest car manufacturer, Maruti Udyog Ltd.
Maruti has reduced its manufacturing forecast to four million units for 2015-16, down from the five million it had projected earlier. It has decided to maintain its current market share of 40 per cent and remain the major player instead of chasing a 50 per cent target to become the dominant player.
The scaled down forecasts arise primarily from what Maruti Chairman R C Bhargava claims is the lack of a political will on the part of the government to unveil another round of reforms to revive economic growth. No bold reforms could be undertaken for fear of lack of support from some allies such as SP in UP and DMK in Tamil Nadu ahead of the assembly polls that were held in these states.
“If there is no stable government at the Centre even after the 2014 general elections, India is likely to have just a single digit growth till 2016”, says Bhargava. There are enough political parties that could block any sensible economic measure that may come up, he lamented.
Car sales have hit the skid row in the domestic market in India probably due to the high interest rates making car loans dearer.
Buyers are waiting for lending rates to soften to buy new vehicles. India was touted as the second largest hub for the manufacture of small cars and even projected to be the largest small car manufacturer of the world till date. The euphoria on which the automobile industry was riding on projections that five million cars would be sold by the middle of this decade is wearing thin.
Worries over GMR investments in Maldives
GOVERNMENT and trade bodies are extremely concerned over the sudden cancellation of an airport maintenance contract of south based GMR by the Maldives government even as UPA government is launching diplomatic initiatives with Maldives to restore the contract. The government’s diplomatic effort is seen as a reassuring move by industrial houses. GMR, has successfully built world class airports with foreign consortia in Istanbul, overseas and Hyderabad and New Delhi in India. It has evolved into a major, credible and a reputed player in the infrastructure sector.
Kingfisher / Jet close to new deals
JET AIRWAYS and Kingfisher are both said to be close to clinching deals with foreign airlines for FDI in their airlines, but the fate of SpiceJet is not clearly known.
Jet Airways is likely to tie up with UAE’s national carrier, Etihad Airways. It’s not yet clear how much stake it’s off loading in favour of Etihad. Kingfisher, which owes more than Rs 7,500 crore to lenders including banks and financial institutions is reportedly restricting foreign institutional investment to three per cent to enable FDI go up to 46 per cent. It’s still unclear about Kingfisher’s move on parties they are looking forward to invest.
Spice Jet was first said to be talking to Etihad but now the latter is closing a deal with Jet. It may be negotiating with Singapore Airlines if the South East Asian carrier relinquishes its original interest to take a stake in Indigo.
IE, the business magazine from south was launched in 1968 and pioneered business journalism in south. Through the 45 years IE has been focusing on well-presented and well-researched articles. When giants in the industry stumbled to keep pace with the digital revolution, IE stayed affixed embracing technology.