Micro & Macro Factors Affecting the Auto Industry, India Essay

2127 Words Apr 10th, 2013 9 Pages
Macroeconomic Policies Affecting the Auto Industry
In most countries, the level of automotive production is closely correlated to domestic or regional automotive sales. Also the level of automotive sales and production is closely related to disposable income levels, interest rates and finance availability, consumer confidence and other factors influenced by macroeconomic policies. Production in particular often has long lead times, so consistent and predictable economic progress is important. Therefore, national macroeconomic and monetary policies which produce stability and consistency in GDP per capita growth are generally very significant factors affecting the level of automotive sales and production.
The following are the
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The following examples of government policies which encourage sound development of a sustainable auto industry have been taken from economies with fully-developed automotive sectors to serve as a useful guide.

(a) Open trade and investment environment to foster economically rational decisions based on market principles, rather than government policies. Some governments in APEC economies have historically adopted auto policies focused on local content requirements, high import tariffs, and investment restrictions which have resulted in a fragmented and relatively inefficient auto industry.
An openly competitive market is most effective in providing the region with world class manufacturing technology, market access for vehicle and component exports, high quality products at reasonable prices and long-term job creation. These ingredients can lead to the development of a healthy and sustainable auto industry in India.
India’s economy should foster economically rational decisions through an open trade and investment environment for developing economies, a suitable and evolving transition timetable may be

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