1st September 2010, 20:13
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| WSJ Article : Indian Auto Boom Gets Bubbly. August 30, 2010, 4:24 PM IST. First Article : WSJ : Indian Auto Boom Gets Bubbly.  The real problem for auto companies soon could be the lack of roads and parking spaces and possible rising fuel prices. The chronic disease of the biggest auto markets in the world–overcapacity–could spread to India sooner than most people think. As everyone from Hyundai to Honda spends billions to rapidly ramp up their production here, sooner or later they will be making more cars than they can sell, say some experts. “I see overcapacity even in the BRICs countries,” Dieter Becker, global chair of automotive coverage at KPMG consulting told India Real Time. “The number of players (in India) has increased dramatically.” The BRICs countries are Brazil, Russia, India and China. That might seem hard to believe with car and commercial vehicle sales climbing to a record high of around 2.5 million in the year ended March 31, and in a country where just 12 people in 1,000 own a car or utility vehicle. But it’s an opinion that even some car manufacturers hold—around one-third of the 200 auto executives who responded to a KPMG survey out earlier this year predicted India would be struggling with overcapacity in the auto sector within the next five years. It’s still a minority view—and hardly the 20% to 35% overcapacity companies are already dealing with in the U.S., Japan and Europe–but it’s something Indian auto executives (as well as investors and car buyers) should think about as they tune-up their plans in India. “Now there are 50 players [in India] and they are still building capacity,” said Mr. Becker. But auto executives and analysts said that if the prices and products are right, India will have no trouble boosting passenger car and commercial vehicle sales. The KPMG survey showed that 40% of respondents expect sales to climb to more than four million by 2014. The real problem for auto companies in the not-too-distant future could be the lack of roads and parking spaces and possible rising fuel prices said, Paul Blokland, director of auto research company Segment Y. “If you look five years from now then it may be impossible for people to use their cars or park their cars,” he said. “That will be more of an issue than capacity.” Link to original article is below Indian Auto Boom Gets Bubbly - India Real Time - WSJ Second Article : Indian Auto parts sector seen at $110 bn in 2020 The Indian auto components sector is seen growing five times to $110 billion in the next decade with investments of more than $35 billion, an industry body said on Friday. Of that target about $80 billion will be from India itself and the remaining from exports, the Automotive Components Manufacturers' Association of India said in a statement. In the year 2020 the auto components sector is expected to provide employment to about 41 million skilled people, contributing 3.6 per cent to India's gross domestic product from 2.1 per cent now, it said. The Indian vehicles industry is seeing one of the fastest growth globally at about 30 per cent and the entry of automakers from overseas is leading to more demand for cheaper autoparts in the country. Last edited by StarVegabond : 1st September 2010 at 20:16. |
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1st September 2010, 20:18
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1st September 2010, 22:10
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1st September 2010, 22:53
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1st September 2010, 23:47
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| Sorry about the numbers was thinking only in terms of car manufacturers  In India the top 3 car manufacturers control 75% of the car market anyway,and neither maruti,tata or hyundai have any overcapacity problems. When you are building a car plant you not thinking for this year or the next but you are predicting demand 5 years from now.So even if a manufacturer plans a 100,000 units a plant today,they are anticipating that demand.And that demand will come from the low penetration.And there will be demand. |
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2nd September 2010, 16:19
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I think they have misinterpreted the lack of proper infrastructure to overcapacity. Just because you cannot park your car doesn't mean that your are reaching overcapacity Waiting periods are stretching and more importantly, new age consumers are willing to wait as well. Also, now India has become a major export hub for all the major manufacturers, Nissan, Ford, you name it. If the WSJ is considering the production figures and considering everything will be sold in India, they are wrong because a part of it will also be exported to other parts of the world. These are my 2 cents..! Last edited by sameern.85 : 2nd September 2010 at 16:21. | |
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2nd September 2010, 16:49
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