Suzuki, which makes half of cars sold in India, is not alone in rethinking the promise of the Indian automotive market
- India autos will no longer see uninterrupted move upwards-Suzuki
- Global players re-evaluating strategy, focus on strengths
Suzuki Motor Corporation said it was no longer gung-ho about India’s auto market, the world’s fourth-largest, where it has seen relentless growth in the past seven years. And the parent of the country’s biggest car maker is not alone.
The Japanese automaker issued the warning after it reported a slump in quarterly profit this week on tumbling sales at its Indian unit, Maruti Suzuki, which accounts for half the number of cars sold in India.
“We no longer think that growth in India will be an uninterrupted move upwards,” Suzuki President Toshihiro Suzuki cautioned. Maruti’s sales, which were growing till January, has slipped every month over February-September 2019.
India’s auto sector has gone into a tailspin this year as tight liquidity at shadow banks, high taxes and a weak rural economy have sapped consumers’ buying power.
Global players like Ford, Volkswagen and Fiat are already re-evaluating their strategy as they struggle to make inroads in a market dominated by small cars.
“Car makers are getting very cautious regarding their future investments in India. Most of them are either deferring or just scrapping their India new model plans,” said Puneet Gupta, an autos sector expert at IHS Markit.