Indian automobile industry and its declining trend

Abstract

The decline in the Indian auto sector has been quite unprecedented and has severely impacted the sales and profitability of automobile companies. The BSE Auto Index, which before the decline was one of the top-performing sectoral indices is now down and has even underperformed the Sensex. Our major motivation for undertaking the study was to develop an in-depth understanding of the Auto sector as an industry and dig deeper into the reasons currently responsible for the decline in the auto sector. We also the topic as an opportunity to also understand the boom which the auto sector was witnessing just before the decline occurred. The project was also looked like a medium also to understand the liquidity which the Indian economy has been of late witnessing after the IL&FS failure and look at the sectoral credit disbursements along with NPA numbers of financial institutions across different sectors. The study was also done to come up with prospective solution and policy measures (fiscal) which could be implemented to overcome this overhang which has been there in the auto sector for more than year which if not corrected could have an impact on other sectors as well. Considering the importance of this sector to the Indian economy on account of being a source of major foreign investments, it becomes essential to revive it to prevent the withdrawal of capital from foreign investors from this sector.