In August 2018, the government announced amendments to the axle load norms, and since that day, the automobile industry started seeing a dip, which is continuing even now. From commercial vehicles to daily use cars and two-wheelers, every segment in the industry saw the hit. This was the most significant downside in history, where some of the segments went as low as 30-40%.
This was combined with a cash crunch seen in the financial market, and the result was low auto sales in the automobile industry all around. The question has always been around, ‘Will the market grow again?’ For this to turn into a reality, many things have to come to the place together, and these include the suppliers, financiers, dealers and all the stakeholders that make up the industry.
But there are ways that it can happen and the automobile industry can flourish again, let’s look at some of the best ones:
1. Changes in the Safety Standards:
India is all set to compete with the global markets. With the new emission standards in place regarding the Bharat Stage VI, India will be open to the global market as exporters to supply them with quality components. This will improve the foreign exchange factor and in turn, will help boost the Automobile sector.
2. The boom of Electric Vehicles:
The electric vehicle market in India is the next big hope. The government has kept aside almost 10,000 crores for electric vehicles in for related subsidies, whereas private enterprises have invested more than 400 crores in the same. The electrification of the automobile can change the face of the industry and give the required electric boost it wants right now.
3. Be prepared for the next-gen car buyers:
Seeing the rising rate of the middle-income group, and their rise in income by 10%, the automobile industry should start shifting their focus towards the highest demand creators of the future. The millennials are now slowly going towards the income-earning category and are already fascinated by the idea of owning a car or any such personal vehicle.
4. Simplifying other problems:
There are a lot of other factors that contributed to the slowdown of the automobile industry. And if one by then the issues are resolved, then there can be a certain change in the graph. Some of the most remarkable ones are:
- Fuel availability: Fuel price is perhaps the biggest topic of debate and concern by everyone who commutes in some way or the other. People have stopped buying and have resort to public transport for this very reason.
- Availability of price credit: People find this burden a bit too much to bear, and there aren’t many options in the financial market to help ease the weight. Helping them with credit options can give them a kick start.
- Road Issues: Poorly constructed roads, heavy traffic density, and other third world issues stop people from buying their own vehicle as it helps them avoid a major chunk of the daily annoyance.
5. Digital Approach:
The digital approach, combined with other sales and marketing campaigns of the automobile industry, can help improve the state of the industry. Digital penetration in India is higher than ever, and brands slowly realize its value. It is effective in generating leads and targeting potential people to push sales.
6. The concept of Pooling:
The concept of carpooling is not full-fledged into the market yet. A few startups exclusively focusing on this business model have started, but they are far from normalizing this as a day to day regular activity. So once people start realizing the massive opportunity it holds in terms of cost optimization, pollution control, and traffic control, they might start swinging in that direction.
The slump in this field is affecting the government, the economy and the industry as such, and it is going to be a mammoth task to pull the industry out successfully. What do you think will be the best way to approach this dip?
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