The automotive industry at a glance

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    The global auto industry is enjoying a period of relatively strong growth and profits, but many regions are threatened by uncertainty. Automakers are looking for better economics, ideal market conditions to make a successful stay in the industry. The automotive industry has a few big players that have marked their presence globally and General Motors, Ford, Toyota, Honda, Volkswagen and DC are some of them. It has also been suggested that the automotive industry has accelerated further, after the period of globalization, due to ease of access and facilities between nations and mergers between the giant automakers of the world.

    Additionally, advances in industrialization have led to increased growth and production in the Japanese and German markets, in particular. But in 2009, the global car and auto sales industry experienced a significant decline during the global recession, as this industry is indirectly dependent on economic changes in employment and spending, making it vulnerable. While demand for new and used vehicles in mature markets (e.g., Japan, Western Europe and the United States) fell during the economic downturn, the industry flourished in developing economies around the world. Brazil, Russia, India and China. The rise of global trade has enabled the growth of global commercial distribution systems, which has also inflated global competition among automakers. Japanese automakers, in particular, pioneered innovative production methods by adapting and modifying the American manufacturing model, as well as using technology to increase production and give better competition. The global automotive industry is dynamic and large, accounting for around one in ten jobs in developed countries.

    Developing countries often turn to their local automotive sector for economic growth opportunities, perhaps due to the extensive linkages the country’s automotive industry has with other sectors. China is by far the largest sales market, followed by Japan, India, Indonesia and Australia. Sales figures from 2005 to 2013 indicate that vehicle sales in China doubled during this period, while Indonesia and India also benefited. However, there was a decline in sales during this period in Australia, New Zealand and Japan. Interestingly, this year competition in the truck segment has become more intense, with the big three US automakers vying for supremacy in terms of performance and fuel economy. The Japanese aren’t giving up either, with Toyota and Nissan launching new pickups in 2015.

    India is the world’s seventh-largest automobile producer with an average production of almost 17.5 million vehicles, with the automobile industry’s contribution amounting to 7% of total GDP. It is estimated that by 2020, the country will see the sale of over 6 million vehicles per year. India is expected to be the world’s fourth largest automobile market by volume where production of two-wheelers has grown from 8.5 million units per year to 15.9 million units over the past seven years and sales of tractors are expected to grow at a CAGR of 8-9%, in the next five years, making India a potential market for international brands. As 100% foreign direct investment is allowed in this sector, India is expected to experience rapid expansion and soon become the largest automotive industry. While India is the second largest manufacturer of two-wheelers and the largest of motorcycles, it is also estimated to become the 3rd largest automotive market in the world by 2016 and account for over 5% of global sales of vehicles. As a large number of products are available to consumers in different segments, offering a wide variety of vehicles of all types, manufacturers aim for customer satisfaction and loyalty.

    Following the FDI policy, the entry of a number of foreign players with a reduced overall life cycle and faster product launches has become a common phenomenon in the country’s automotive industry. The Indian automobile market is considered as the potential market which can dominate the global automobile industry in the coming years. Moreover, giant dealers and manufacturers are moving towards the country due to the ease of financial standards as well as such a conducive environment to support in their projects.

    With Narendra Modi’s Make in India campaign, the automotive industry is expected to experience many changes, where 800 Cr has been allocated in the budget to promote the manufacturing of energy and hybrid vehicles. The move is expected to lower prices, making these electric and hybrid vehicles cheaper and more environmentally friendly. This measure is also expected to reduce carbon dioxide emissions to 1.5% until 2020. This program will subsidize the purchase of new hybrid and electric cars, as well as other types of vehicles. It specifies incentives of up to 29,000 rupees for scooters and motorbikes, and up to 138,000 rupees for cars. Three-wheeled vehicles, light commercial vehicles and buses will also be eligible for incentives of varying amounts.

    The used car sector in India has become one of the leading industries due to its ease of access and low rate of interest. But the growth of used car sales is lower than that of new car sales because people still prefer buying new cars over used cars. A big reason for this could be the fact that there is a reduced supply of used cars, and the high prices of these used cars push consumers to opt for new cars at lower prices. But despite slower growth compared to the new car segment, the used car industry has seen rapid and steady growth. According to industry analysts, used car sales are expected to increase over the next few years.

    Until the last decade, consumers were involved in the unorganized sector of the used vehicle industry, there were no organized players to help consumers buy used vehicles, and about 60% of used vehicle sales were customer to customer where there is a trust factor. The remaining sales were handled by local dealers. But then in 2001, Maruti came up with the first used car sales company in 2001 – Maruti True Value. Although the automotive industry has seen a decline in sales in recent quarters, the used or used car segment is growing rapidly and is expected to accelerate in the future. In fact, over the last fiscal year, more used cars were traded, 10% more than new, according to Maruti Suzuki India Ltd’s valuation. and Honda Siel Car India Ltd. With the advent of organized players, the used car market has benefited from fair deals, warranties, a better retail network, credibility, transparency and ease of financing. All this made it easier to buy a used car. Organized used car showrooms offer potential consumers a platform to choose cars from different brands and segments. Car manufacturers have realized the potential of the used car market and are making conscious decisions to operate in the used car business as well. In addition to exposing multiple brands, branded used car retailers also offer a one-stop shop for all inquiries and complaints. All major car dealerships have now established their used car segment retail showrooms, Maruti True Value, Ford Assured, Hyundai Advantage and Toyota U Trust are some of the major used car dealerships .

    Steady lower fuel prices and better financial policies over the past year are the factors that are expected to be the reasons for the increase in new buyers entering the market, which declined in 2013-14. But over this period, one segment that has benefited from this decline has been the used vehicle market, with increased awareness, financial reforms and organized businesses. Most of these used car buyers are younger people who prefer buying used cars at lower prices and getting a good deal for the same. India’s used car market, which still accounts for almost a quarter of the new car market, is growing at a rapid pace. The used car sector is expected to grow by 15-18% in the coming years.

    Moreover, with the increase in the number of organized players, people’s confidence in buying a used car has increased. These players not only offer a good range of used cars, but also offer extensive vehicle financing and checking services for 100% customer satisfaction.

    The automotive industry is an important part of every economy as it is closely linked to the growth of sectors in the economy. India, as one of the advancing economies, is resolving to make its automotive industry more and more prosperous, linking it to overall development. With the Make in India campaign and the promotion of eco-friendly vehicles, India is soon set to become the biggest automobile industry in the world. The used car industry is expecting huge gains with more and more people embracing it, alongside the growth of the new car market. With more resources for buyers and sellers, the automobile industry is expected to flourish meritoriously in the future, ultimately driving the country forward.



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