Indian Car Market Slumps as Higher Interest Rates Hit Home

Glenn Swanson
by Glenn Swanson

India’s economy is growing fast. Too fast. To curb inflation, the country’s central bank has been busy raising interest rates. reports the result at the auto industry’s sharp end: new car loans are the most expensive they’ve been in five years. As nearly 75 percent of all of India’s fresh whips are purchased on credit, the new car market has slumped since June. Most Indian automakers are reacting to the credit crunch by trimming production or holding off on new factories. With plans for three new plants in the next 18 months, Tata managing director Ravi Kant has decided to offer new customers deep discounts to move the metal. If and how this will effect the Indian automaker’s bid for Ford’s damaged Jaguar brand is uncertain, but it can’t help.

Glenn Swanson
Glenn Swanson

Glenn is a baby-boomer, born in 1954. Along with his wife, he makes his home in Connecticut. Employed in the public sector as an Information Tedchnology Specialist, Glenn has long been a car fan. Past rides have included heavy iron such as a 1967 GTO, to a V8 T-Bird. In between those high-horsepower cars, he's owned a pair of BMW 320i's. Now, with a daily commute of 40 miles, his concession to MPG dictates the ownership of a 2006 Honda Civic coupe which, while fun to drive, is a modest car for a pistonhead. As an avid reader, Glenn enjoys TTAC, along with many other auto-realated sites, and the occasional good book. As an avid electronic junkie, Glenn holds an Advanced Class amateur ("ham") radio license, and is into many things electronic. From a satellite radio and portable GPS unit in the cars, to a modest home theater system and radio-intercom in his home, if it's run by the movement of electrons, he's interested. :-)

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  • Glenn126 Glenn126 on Sep 28, 2007

    Perhaps just perhaps Tata will be the next "Hyundai" reaching the shores of the USA, instead of a Chinese auto company. If any outfit can succeed, it'd be them (and/or Mahindra & Mahindra). Mahindra's millstone-around-the-neck (at this time) is the fact that they haven't engineered their "own" cars yet - but have truck and SUV's (with SUV's potentially a declining US "interest" while small cars - Tata's specialty - an increasing US "interest"). Mahindra has an advantage in already successfully selling (apparently very good) light and medium tractors in the US, and as International Harvester found for many a decade, farmers, ranchers and companies will buy trucks with the same badge as their tractors, if given a chance... and the quality is right.