Auto industry may reconsider its expansion plans

New Delhi, Sep 3 (UNI) The Captains of the automobile industry today hinted at a 'major rethink' in capacity expansion as the auto market is facing difficult times in pushing sales.

Speaking at the sidelines of ACMA convention here, Society of Indian Automobile Manufacturers (SIAM) President Ravi Kant said companies might have to hold back some of the committed future investments.

''The auto industry finds itself in a difficult time and I am sure that every body would be looking at these things, as to what can be postponed and what can be cancelled,'' Mr Kant said.

According to him, a lot of investment commitments as per the Automotive Mission Plan 2016 were made and many of them are already executed. But, the current situation might force change in future plans.

''As far as the capacity is concerned, there would be a major rethink on that,'' he said.

He attributed the downward trend in auto sales to high interest rates and lack of finance. ''It is a serious issue. Profitability and margins are getting squeezed,'' he added.

Describing the current situation as serious and unique, Mr Ravi Kant said the industry is also bearing brunt of rising foreign exchange rate.

''We are having difficulty in the domestic market and, at the same time, we are having no respite from outside,'' he said.

UNI TEAM SG RK1708