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Automakers Invested Rs. 22,000 Crore Despite Slow Demand

By Motortrend India Staff   |   09 January,2013

Despite the Indian Automotive Market is reeling under unfavourable consumers’ sentiments and slowing demand, it made an investment of Rs. 22.000 crore. In addition, another $ 1 billion has been invested by the components and ancillary companies to complement the money pumped in by vehicle manufacturers, said officials of Society of Indian Automobile Manufacturer (SIAM).

Vishnu Mathur, director general of SIAM said, "Although investment levels have been impacted this year by the slowdown in demand and uncertainty over the government's diesel fuel policy, overall vehicle manufacturers alone still invested more than Rs 70,000 crore in the last four years."

Executive director of ACMA , Vinnie Mehta, commented, "The auto component industry has invested around $6-7 billion in the past four years at the rate of $1.7 billion in 2009-2010 , $2-2 .5 billion in 2010-11 , $1.6-1 .9 billion in 2011-12 and an estimated under $1billion in 2012-13 ."

Industry experts Mathur, commenting on the staggering figure said, "The investment levels would have been much more had overall capacity utilization levels been better. But with demand slowing down, many investors have either postponed or slowed down their investment levels."

The automotive industry has seen declining demand this year. In 2010, motor vehicle demand had reached over 20% growth but came down rapidly in 2012. The overall estimate for the auto industry is down from 11 - 13% to 5 – 7 %.

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