New Delhi: Faced with difficulty in pushing sales, the automobile industry could have a ‘major rethink´ in expanding capacity and executing some of the committed investments, SIAM today said.
“The auto industry finds itself in a difficult time and I am sure that every body would be looking at these things, as to what can be postponed and what can be cancelled,” Society of Indian Automobile Manufacturers (SIAM) President Ravi Kant said on the sidelines of ACMA annual convention.
He said as per the Automotive Mission Plan 2016, a lot of investment commitments were made and many of them were executed. But considering the current situation, it could change.
“As far as the capacity is concerned, there would be a major rethink on that,” said Kant, who is also Managing Director of Tata Motors. He said the downturn in sales due to high interest rates and lack of finance is impacting the auto makers.
“It is a serious issue. Profitability and margins are getting squeezed,” Kant said. Describing the current situation as serious and unique, he said the industry is also bearing brunt of rising foreign exchange rate.
“We are having difficulty in the domestic market and, at the same time, we are having no respite from outside,” he said.