INSUBCONTINENT EXCLUSIVE:
Suzuki Motor Corp said it was no longer gung-ho about India's auto market, the world's fourth-largest, where it has seen relentless
growth in the past seven years
And the parent of the country's biggest car maker is not alone.The Japanese automaker issued the warning after it reported a slump in
quarterly profit this week on tumbling sales at its Indian unit, Maruti Suzuki, which accounts for half the number of cars sold in India."We
no longer think that growth in India will be an uninterrupted move upwards," Suzuki President Toshihiro Suzuki cautioned
Maruti's sales, which were growing till January, has slipped every month over February-September 2019.India's auto sector has gone into
a tailspin this year as tight liquidity at shadow banks, high taxes and a weak rural economy have sapped consumers' buying power.Global
players like Ford, Volkswagen and Fiat are already re-evaluating their strategy as they struggle to make inroads in a market dominated by
small cars."Car makers are getting very cautious regarding their future investments in India
Most of them are either deferring or just scrapping their India new model plans," said Puneet Gupta, an autos sector expert at IHS
Markit.Auto executives and analysts point out that some car makers are focussing on their strengths in terms of products instead of chasing
Some others are taking drastic steps to reduce their exposure.Ford has agreed to sell a majority stake in its India arm to Mahindra -
Mahindra, ending its independent operations in the country after two decades and highlighting the challenges automakers face in growing
profitably in Asia's third-largest economy.Dialling BackA cocktail of higher taxes under a new goods and services tax regime, flip-flop
over electric-vehicle policy, and a boom of ride-sharing firms such as Uber and Ola have all plagued global automakers in India
Not having the right cars and smaller sales network have also hurt, some executives say."When you have policy instability it becomes very
hard to convince headquarters to invest more in the country," an executive at a western automaker said.India is largely a small-car market
and that is not a strength for most global automakers, who sell more SUVs and luxury cars elsewhere such as in China and the United States -
the world's top two car markets, the executive added.Western automakers had to design products specifically for India which is an
expensive exercise, said V.G
Ramakrishnan, managing partner at consultancy Avanteum Advisors."Many chose a mass-market strategy instead of a niche one," and are dialling
back to focus on specific segments, he said.Volkswagen has put its sister company Skoda in charge of India strategy and will focus on SUVs
Fiat too has put SUV-maker Jeep in charge of driving sales in the country.Demand for SUVs in India is growing faster than some small car
segments, prompting even the likes of Maruti that dominates the small-car space to look at launching SUVs and crossovers.Honda is
re-evaluating its India plans and may convert one of its two plants into a research centre, local media reported.Toyota and Suzuki have
formed an alliance to share supply chain costs and develop new vehicle technologies together."Automakers want to exploit their existing
resources, minimize their costs and maximize their returns," Gupta said.(This story has not been edited by TheIndianSubcontinent staff and
is auto-generated from a syndicated feed.)Get Breaking news, live coverage, and Latest News from India and around the world on
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