The industry which seems to be most affected by the growing inflation and the related economic developments is the automobile industry. According to the industry reports the industry is going to face a downfall in demands and consequently a negative growth for most of the companies.
The rising steel prices had already hit the industry hard and the companies had to increase the prices of most of their models by Rs 20 thousand to 30 thousand. Now in the current scenario the government has increased the cost of petrol substantially and inflation figures have led RBI to increase the REPO and Rev REPO rates, prompting the banks to increase their intrest rates. Therefore their is no rewards for the customers to go for a new purchase of vehicle.
The automobile industry robust growth came in recent years from the growing middle class who had increased 'disposable incomes' and therefore they were investing in four wheelers . Now the fuel costs have increased and the increased intrest rates of banks means higher EMI's , these two factors are new deterrents for the new customers.
The industry has to come up with new and innovative ideas to promote their vehicles in the current situation . Having said this i am reminded of the recent MARUTI Vagon -R ad and also INDICA Zeta ad, these two ad speak of the new 'LPG KIT' which the company has fitted into the cars and these come to the customers at no extra cost. Now this is VALUE for the customers. the customers know that the fuel cost have increased and this is a way to beat it ( by using LPG kit ) and the fact that the company provides this for free is an incentive for the customers.
In another ad a small girl is ready to sacrifice her ice cream for the fuel of the car, but eventually she realizes that her parents are a Maruti user and therefore she need not sacrifice. This Ad tries to convey that if you are a maruti user you need not worry about the rising fuel costs.
Overall in my opinion the industry is surely going through a though time , the industry has to come out with products , offers and promotion schemes that has the ability to affect the mindset of the customers in such a way that they become ready to buy the products in spite of all odds.
