MUMBAI: Faced with surging raw material costs, Indian car-makers now face three additional serious challenges, including a shortage of key components, which could impact their performance this year.
While they could pass on the burden of increased input costs to customers, a shortage of components, compounded by the March 11 tsunami and quake in Japan and the Reserve Bank's latest rate hike -- which could affect car financing -- have made them jittery over their prospects in the short-to-medium term.
"Yes, the industry is facing problems, but we are taking it as a big challenge. We think this is a passing phase -- we see light at the end of tunnel," General Motors India Vice-President P Balendran said.
A shortage of critical components, many of them sourced from Japan where many automobile facilities, besides others, have been damaged by the powerful quake and tsunami, has made the going tough for the industry, which is likely to find it difficult to meet its sales targets, he said.
"Frankly, it is difficult to meet earlier projected (sales) figure this time. A shortage of components, including tyres, casting and steel, has made things difficult," he said.
The hike in key rates by the Reserve Bank, which is expected to push up interest rates on auto loans, could deter potential buyers, Balendran said.
The General Motors executive said, "It is difficult to predict a timeline for the problems to be resolved."
Home-grown auto major Mahindra & Mahindra is confident of the long-term potential of the industry, but feels the sector is likely to be stymied by the Japan crisis and RBI rate hike in the short-term.
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While they could pass on the burden of increased input costs to customers, a shortage of components, compounded by the March 11 tsunami and quake in Japan and the Reserve Bank's latest rate hike -- which could affect car financing -- have made them jittery over their prospects in the short-to-medium term.
"Yes, the industry is facing problems, but we are taking it as a big challenge. We think this is a passing phase -- we see light at the end of tunnel," General Motors India Vice-President P Balendran said.
A shortage of critical components, many of them sourced from Japan where many automobile facilities, besides others, have been damaged by the powerful quake and tsunami, has made the going tough for the industry, which is likely to find it difficult to meet its sales targets, he said.
"Frankly, it is difficult to meet earlier projected (sales) figure this time. A shortage of components, including tyres, casting and steel, has made things difficult," he said.
The hike in key rates by the Reserve Bank, which is expected to push up interest rates on auto loans, could deter potential buyers, Balendran said.
The General Motors executive said, "It is difficult to predict a timeline for the problems to be resolved."
Home-grown auto major Mahindra & Mahindra is confident of the long-term potential of the industry, but feels the sector is likely to be stymied by the Japan crisis and RBI rate hike in the short-term.
toi
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