Interest rates and hike in fuel costs have certainly caused a downward trend in the Indian Auto Industry over the last two months. It was further mentioned that passenger car sales went down to 10.7% to 69,529 in the first quarter of this year compared to sales of 77,858 units one year ago. Ratan Tata, Chairman of Tata Motors, has voiced that the current Western European crisis may further hinder passenger car sales. According to report, Ratan Tata has warned that this year might be very challenging for car manufacturers in India as the Auto Industry is made to sit tight with less demand. Tata told that if the Government decreases to spend on infrastructure it would certainly have an impact on their sales, although commercial vehicles recorded a 13% rise in first quarter sales. All these he told is because of Western Europe’s crisis in currency issues and the challenge with less demand for passenger car sales is sure to happen.
Ratan Tata also stated that company should capitalize on economic downturn to borrow capabilities of low-cost manufacturing through design. He told that there were efforts being made to protect its shares in the market with the presence of many International Auto Companies present in India currently. He further told that they needed to fill up many product gaps that they would have to and that the joint products are currently being worked on with Land Rover, Jaguar and Tata Daewoo.