NEW DELHI: India’s automobile industry is facing “unprecedented challenges,” hit by hefty interest rates and rising costs, said the head of the Society of Indian Automobile Manufacturers yesterday. The sector is reeling from a triple whammy of interest rates at seven-year highs, costly fuel and climbing steel and other raw material costs, said Ravi Kant, president of the Society of Indian Automobile Manufacturers (SIAM).
India is aiming for $145 billion in sales for the automotive sector by 2016, accounting for 10 percent of its economy, from 34 billion in 2006, according to the government’s 10-year Automotive Mission Plan. It is also aiming for 25 million indirect and direct auto sector jobs, up from 13 million, but Kant warned that the achievement of the plan was at risk. “The Indian automotive industry is facing unprecedented challenges,” he told SIAM’s annual meeting in New Delhi.
Kant appealed to the government to take “corrective measures” so the automotive plan’s goals can be met.