Indian Car Market Slumps as Higher Interest Rates Hit Home
India’s economy is growing fast. Too fast. To curb inflation, the country’s central bank has been busy raising interest rates. Bloomburg.com 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.
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.