Engines Of Growth
Employers only handle the money – it is the customer who pays the wages.” — Henry Ford
The Reserve Bank of India projects a 7.8 per cent growth in the economy during the 2022-2023 financial year and indeed, a turnaround from the pandemic-inflicted slowdown is evident. Some sectors of the economy, though, still need that extra little thrust to be able to be on the path to recovery. The automotive sector, which we chose as our cover feature for this edition, is one such sector. The domestic automobile industry is under tremendous stress with no room for manoeuvre.
While we celebrate and recognise the good work of young entrepreneurs who are creating an ecosystem around the ‘Going Green’ theme (BW AUTO World 40 Under 40), we also recognise that the traditional automotive industry that caters for petrol and diesel fuelled vehicles, is fighting a difficult battle. The industry already faces demand-side constraints and is now also under pressure to go green, launch more electric vehicles and pay more taxes.
Indian automotive makers cannot manufacture more cars, bikes and commercial vehicles because of slowing demand, high input costs, rising fuel prices and the pressure to comply with environment-friendly norms. Consumer apathy stems from the continuously rising cost of owning vehicles. With the central bank hiking interest rates, loans for purchasing vehicles is slated to rise too, which could dampen the uptick the passenger car market has witnessed over the past year.
During the financial year gone by, sales of petrol and diesel fuelled cars jumped 13 per cent to a little over three million units. Electric vehicles (EVs) sales more than tripled to 4.29 lakh units compared to 1.34 lakh EVs in the previous fiscal. Electric two-wheelers made up the bulk of these sales, but EVs comprise a small share of the industry. The small car market, considered the ‘bread-and-butter’ of leading car manufacturers like Maruti and Hyundai, has shrunk considerably. Conversely, the steep rise in input costs has forced automotive manufacturers to hike prices multiple times.
In another special segment, we bring to you expert views on the much awaited initial public offering (IPO) of the Life Insurance Corporation of India (LIC), which got fully subscribed within two days of having been launched. The LIC is not just the largest insurance company in India, it is also a leading financial institution that has traditionally played the role of a stock market mover. Read the analytical insights into the nuances of the offloading of 3.5 per cent of the government’s stake in LIC.
Of course, this issue also has all the regular columns and features you look forward to. Happy Reading!
