Saturday, January 23, 2021

Why are India’s Automobile Companies Struggling To Meet Local Demands?

Indian automobile companies have started to cut back on exports to meet the soaring demands of the upcoming festive season. The Indian automobile companies are running at their peak capacities but are still not able to meet the surging demands of the approaching festival season. The automobile industries in India are facing a problem of crippled productivity. 
Caught in this tangy problem, automakers in India including Maruti Suzuki, Hyundai, Bajaj Auto and others are trying to meet local demands by diverting productivity originally meant for exports.

Indian Companies Cutting Down On Exports To Meet Domestic Demands

Hyundai has for years been the largest exporter of Indian cars. But now the company is eventually shifting its export production out of the country and is resorting to exporting vehicle kits rather than fully built vehicles. All of this is being done to keep pace with the increasing domestic demand. Maruti Suzuki, the leader among Indian automobile companies too is cutting down on exports as it chases fresh capacities to deliver on the domestic demands.

In the next few years, Maruti’s exports are expected to drop to 6 per cent from 9.42 per cent at present. Hyundai will be generating an extra capacity of 1 lakh by shifting exports to bases other than India. Hyundai’s exports have fallen from 50 per cent to 25 per cent in the last 5 years and it is further expected to drop to 15% in the next two years. Honda too will manufacture more cars for the local markets than for exports during the festive season.

Companies are fearing losing sales given a scenario in which they are unable to meet demands. India witnesses a great surge in demand during the festive season and all companies now have the challenge to meet the demands which will soon shoot up given the fact that the festive season is just around the corner.

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