The new financial year saw a great deal of sale for the auto industry, but the equally critical situation is the lack of production. The increase in the passenger car is 40% as the two wheeler saw the rise of 22.07% in April 2010. The hike in the sale volume of commercial vehicles was 64%. The joy could not be reminiscent for the companies which face the production crisis to meet the demand. Given this handicap, the industry analysts see that the growth of the industry will be 10-14% during the FY 2010-11 against 26% last year.
The demand has cut short itself due to lack of production resulted out of rececssion. The companies did not expect the sudden outburst of demand making them cajole over the situation. The major car makers who face this problem in India are Maruti, Hyundai and Tata Motors. Maruti has the capacity of 1 million units, which it has already reached and has started the proposal for a new project at an investment of Rs1700 crore. Till this facility becomes able to supply the demand there will be contented production by Maruti. For Maruti this year will not be a problem to manage since it can deliver 2 lakh units by debottling the suppliers, said its Marketing Head.
Similar condition prevails in the camp of Hyundai, which saw a sale of 5.6 lakh units in 2009 and the company’s target for 2010 is 6 lakhs. The company sees crisis in production which may hit the export market too. The company is capable of producing 6.3 lakhs a year. The situation in Tata Motors is somewhat relieved with less bottleneck crisis in non-car segments. Its truck Ace gets the face of insufficient supply because the plant shares the production of 50000 units of Nano. In the two wheeler market, Hero Honda is facing the crisis and has evolved the fourth plant for the near future.
A sigh of relief is shown in the camps of VW, GM, Ford who have come out with small cars. There will be an addition of 10000 units to the existing volume, among Polo, Beat and Figo. The annual units may come around 150000 units. The passenger car market gets the addition of 10% from this segment. The other side of the coin rests on the suppliers and vendors, who always prefer for the established makers. They don’t take into account the new facility by the car makers. In spite of these hiccups, the auto industry has seen the highest volume, after a decade, a growth of 50.29% found in 1999.