Corona's strike hits foreign car companies' 'Bharat Project'

- The economic downturn pushed India to fourth place in 2016 and fifth place in 2020 due to the Corona epidemic: General Motors and Harley-Davidson stopped production in India last year.

The Corona epidemic and the resulting economic uncertainty have created dire conditions for companies ranging from the common man. Foreign car companies, which had earlier announced billions of dollars to invest in India and set up a manufacturing plant, are now forced to seriously reconsider. Decades ago, India was widely expected to be the world's largest car by 2030, but the situation turned sour, with the economic downturn pushing India to fourth place in 2016 and fifth place in 2020 due to the Corona epidemic.

Expectations of foreign automobile companies for the fast-growing Indian car market are fading in the wake of the second wave of the Corona epidemic and fears that recovery from limited government spending on economic stimulus will be slower than in the US-China.

Of course, carmakers are expecting an improvement this year in sales growth for vehicles pushed to the bottom of the decade following the Corona epidemic. Experts in the automobile sector said that this would be due to the small and affordable car segment instead of the premium models or expensive cars introduced by foreign car companies.

India-based manufacturing plants of foreign auto companies are operating at low capacity and sales of companies like Ford, Honda, Nissan, Skoda and Volkswagen are far below expectations. While some foreign car companies are having difficulty deciding on future investments, it has become a question of survival.

Experts say that choosing to stay in India is based on cost-benefit analysis of other international markets, and that the number of car manufacturers in the country could fall if the far-sighted scenario looks negative. Last year, General Motors and Harley-Davidson stopped production in India.

"India's car market has not grown as expected and the situation has been exacerbated by the Corona epidemic, which has hurt domestic sales and exports," said a senior official of a leading foreign car company. Uncertainty over the long-term growth prospects of the auto industry and the economy has led to serious challenges, including capacity utilization.

Decades ago, it was thought that by 2020, India would be the world's third largest car market after the US and China, but on the contrary, due to the economic downturn, it was pushed to fourth place in 2015 and fifth due to the Corona epidemic. With a population of 120 crore, India was considered a mature car market in terms of per capita car ownership.

Of course, the purchasing power of Indian consumers is much lower than in the West. The average price of a car in the US is ડો 2,000 while in India it is ડો 10,000. There are only 6 cars per 1000 population in India.

At a time when more mature, lucrative markets are investing in electric vehicles and investing in future technology, prospects for foreign companies are dimming. According to the Society of Indian Automobile Manufacturers (SIAM), sales of Ford, Fonda, Skoda and Volkswagen have declined by 20-2 per cent in the financial year ended March 31, almost double that of Maruti Suzuki and Hyundai. Nissan had expected a 4 per cent share of the Indian car market by 2020, though it is currently less than one per cent. So Honda's stake fell from 8% to half 3% when it shut down one of the two plants in the country.