Over a Decade the demand and consumption for Automobiles has always surpassed previous numbers in India. As there is a rise in disposable income, government incentives and growth in demand for vehicles have surpassed all previous records for sales which shows the rising Economic power of the country.
A Vehicle plays a vital role in Indian Families. It acts as a member of a family, whether it’s a two-wheeler, four-wheeler, or a vehicle for commercial use (Three-wheeler, Trucks, and buses). A Vehicle is more than just an Automobile Machinery in India. A rise in Vehicle purchases shows the economic growth of a country. There are Millions of parts in a Car and to manufacture those parts thousands of vendor companies are required and those vendor companies further supply the order to sub-vendors. As there are thousands of Vendors company and skilled laborers associated with the industry directly or indirectly. So, when a new automobile manufacturing plant opens into a place it gives not only the opportunity of employment to thousands of people but a plan to raise their standard of living and provide all necessary needs to the family through their employment.
So the Big Question is What happens when there is an Economic slowdown?
Consequences Of An Economic Slowdown:
A Country’s progress can also be seen through how many new vehicles have been sold every month for at least the last 2 quarters. Economists use it to understand and predict whether the country is moving towards the projected desired growth or moving towards the recession so the government can take necessary actions on time to revive the economy with policies.
When there is an Economic slowdown the first thing people tend to do is buy only the necessary things and stop spending on luxury items. People tend to spend only on their needs rather spending on their wants. So, the demand for new vehicles decreases, and when the demand decreases and the supply remains the same both the equilibrium price and the quantity will fall. Which hurts the entire industry.
Conclusion
Economic Slowdown poses a huge challenge to Automobile industries like changes in consumer behavior, demand and supply adjustment, and price barriers. To mitigate these effects companies come up with various strategies and promotional activities to lure the customer to drive the sales. Depending on the strategies how consumer friendly they are helps in landscaping the company’s future to come.
