Weak Indian Rupee Poses Threat To India Automobile Makers– To Hike Prices And Increase Exports


Indian Rupee (INR) is probably it its all time low in past many years against US Dollar with 1 US Dollar equal to more than 52 Indian Rupees. Not long time back, 1 US Dollar traded close to Rs. 45 or so before August 2011. This sudden surge in price of 1 US Dollar against rupee has deepened the financial worries of Indian Automobile makers. Most of the automobile companies in India import some or the other raw materials, auto-components or complete cars as CBU for Indian market. All these cars will now become much more expensive to manufacture under the present scenario. On the other hand, the auto-component makers who export from India will stand at benefit as they will get more Indian Rupees for their Dollars received from abroad, but on a bigger level, this is not good for Indian economy as it will decrease the already shaky demand of cars in India as the prices are likely to go up again.


image – US Dollar

To offset the increased exchange rates of the dollar against rupees and slowing down Indian domestic sales of cars, which are at their all time lowest growth  in past decade, most of the large car makers from India are exploring more and more export markets. The global demand of cars is not as badly hurt as they are in India, so there is a good scope of large players to increase exports of cars by entering into new global markets or increasing their cars portfolio in the existing markets to increase their car exports from India. This will not only help in increasing overall sales and but also will help to offset the impact of weakening Indian rupee currency. These are tough times for Indian automobile industry and we hope it will pass in coming few quarters. We have our fingers crossed and eyes glued to all the latest happenings of the industry. To stay updates, like our Facebook Page and sign up for our free email newsletter.

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