Search the Internet          Tips  Sites: Finance, Investment

Economic slowdown hits auto industry in 2001

Auto industry hit a roadblock due to economic slowdown, but went into overdrive with new models of commercial vehicles and two-wheelers crowding the already congested roads in 2001.

The commoner's two-wheelers remained under strain on account of poor scooter sales. However, the booming motorcycle market, which accounted for 60 per cent of the segment, kept attracting young customers with sleek and fuel-efficient models to overcome the slump in the two-wheeler segment.

The growing demand for motorcycles also forced scooter makers like Kinetic and LML to foray into motorcycle manufacturing which resulted in rich dividends.

Commercial vehicles too drove downhill as demand from both the private and public sectors fell.

However, growth in sales of medium and heavy vehicles, used mainly in infrastructure sectors like cement and steel as well as transportation, in the later part of the year could be interpreted as a slight resurgence in the sluggish economy.

The commercial vehicle business witnessed power, comfort and features as the driving forces with two of the major manufacturers, Telco and Ashok Leyland and Swedish major Volvo, rolling out new and advanced models.

Sales of high-priced but highly efficient multi-axles vehicles increased which showed a change in customer demand and the trend of things to come in the future, especially after completion of the ongoing massive Golden Quadrilateral Highway programme.

The year witnessed stiff competition between Hero Honda, which commands 50 per cent motorcycle market and Bajaj, which enjoys 50 per cent share in the overall two-wheeler industry.

Both the companies rolled out new models to capture a larger pie of the growing motorcycle market. Others like TVS Motor Company, Yamaha and Royal Enfield followed suit.

Another striking feature of the domestic two-wheeler industry was the changing face of joint ventures as foreign partners detached themselves from their Indian counterparts.

While Japan's Suzuki Motor Corp exited from TVS-Suzuki Ltd, another Japanese giant Yamaha bought out its Indian partner, Escorts Ltd.

Scooter makers like Kinetic and LML launched motorcycles with modern engines in alliance with South Korea manufacturers Hyosung and Daelim.

Like fuel-efficiency, power also became the forte as Bajaj rolled out the country's most expensive motorcycle- the 175cc 'Eliminator'. The company said it has launched the motorcycle to showcase its technological prowess.

The future is set to see entry of more high-powered motorcycles along with fuel-efficient 100cc models.

Undeterred by shrinking scooter sales, Japan's Honda Motor Co forayed into the scooter market through its 100 per cent subsidiary -Honda Motorcycle and Scooter India and launched its debut model 'Activa'.

The two-wheeler market was also gripped by the fear of cheap imported Chinese motorcycles. However, the initial hysteria about these motorcycles died out due to the customer concerns about their quality and after-sales service.

ALSO READ:
The Year That Was