There are so many speculation regarding what could be the Reasons for Slowdown of Automobile Industry. So here we are with some of them.
Major Reasons for Slowdown of Automobile Industry
- There is general atmosphere of uncertainty so, slowdown is mainly due to global economy, demand & supply and business cycle.
- Investments are low, people have less money and purchasing power and rural economy is mainly struggling.
- Public sector banks are going slow.
- Many industries are laying off workers in order to pay lesser amounts.
- Workers mainly from rural areas are drastically effected as they have no jobs and no money to fulfill their family needs.
- There is fall in demand of vehicles by 26% due to 28% goods and .
- Many people postpone their first car due to better metro connectivity in cities, cheaper ad-based cars and traffic jams.
- Lack of demand of vehicles is a serious doubt for automobile industry which imposes more than 37 million people.
- There has been great focus on installation of electric vehicles which is decreasing the demand for petrol and diesel cars.
- Supreme court has ordered that insurance will be for 3 years.
- Non Banking Financial companies are having limited funds to give loans.
Some Other Reasons for Slowdown of Automobile Industry
- Price of cars has been moved from Euro 4 to Euro 6 i.e. there is increase in prices of cars because of less finance available with industry.
- Petroleum which was @40-45% has fallen to 20-25% for Euro 6 as prices of cars are increasing.
- There is impact on workers working in industries.
- Many manufacturing automobile industries are having low profitability.
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