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hello,
I read today in news papers that the car sales in India were down due to economy slow down. What are the other indicators?
Regards,
harish

Harish

Your mentioned point i.e. car Sales is not a direct Indicator of economic slowdown. Still the LUV, MPV, SUV, Diesel vehicles are selling well & many more newer models are in pipeline for release. Even in January every car maker hiked prices up to 5%. No one hikes prices when there products are not selling. So far no car maker have not reduced their prices. Their so called heavy discounts(offered) is a hidden factor in terms of exchange bonus, loyalty bonus, savings in interest rates...etc, which are just gimmicks made on exchange of vehicles.

Every commodity is having its cyclic nature in market. 2009-10 onwards, Car Sales was in northward direction & each car maker was giving positive data. Probably they're moving into the later part of the cycle.

Ex. Sugar Production is of 4 years cyclic. i.e. For 2 years, farmers gets good crop & huge profit. 3rd Year, they may get good crop But low sugar yield due to repeat of same crop, lack of rains, no export option due to surplus production...etc and hence less profit. By this time, farmer will lose interest and look for some other crop which gives better margin. 4th year, farmers reduces sugarcane crop and hence it will be deficit a production, inversely market demand increases. Again the cycle repeats.

Even now steel companies are hiking prices every often. Cement production is doing well. Petrol/ Diesel consumption has not reduced. There is an increase of 13% consumption in petroleum products compared to last year. No change in import pattern of items into India. Countries Inflation is still stubborn - not coming down. People are still buying/investing in Gold & silver comfortably.

More over this year 10 states are going to face Assembly election & within one year Parliamentary Elections. So plenty of black money will be spent/circulate in the market, which will delay the slowdown(if so) to some more time.

Job creation/sustenance and Money Rotation are two separate factors linked to Economic Slowdown. Economic Slowdown is directly related to free flow of money in the market. As inflation is high and all the essential commodity prices are going upwards, buying power of individuals is coming down. But money rotation has not come down.

Overall, As long as Money Rotation is there in the market, Slowdown will be a distant factor. Discrete Factors can affect each individuals differently.

Look at GDP growth rates for the current quarter and year. This would indicate if there is slow down or not.

http://www.tradingeconomics.com/india/gdp-growth-annual

Tvsh

Have a look at the GDP of India for the last 20 years, you will find the dips on an average of 4-5 years.

When compared with other developed countries like Japan(-0.7), UK(0.7), Netherlands(1.3), USA & France(1.7), Canada(2.5),
Germany(3.0), Singapore(4.9), India is doing pretty well.

The replies,suggestions, and information posted on this site by msn1270 are quite useful.keep it up msn1270

msn1270 wrote:Tvsh

Have a look at the GDP of India for the last 20 years, you will find the dips on an average of 4-5 years.

When compared with other developed countries like Japan(-0.7), UK(0.7), Netherlands(1.3), USA & France(1.7), Canada(2.5),
Germany(3.0), Singapore(4.9), India is doing pretty well.

Growth is cyclical in nature, so you will have periodical dips.

You cannot compare the growth rates of developed nation such as Japan or USA with a developing nation such as India. In developed nation, infrastructure is fully developed, where as in a developing nation, there is ample scope of growth in terms of infrastrucutre. Even on an individual level, In developed countries, middle class and above usually have all the required white goods,etc. so there is little scope of buying new items out of necessity. We should be comparing our growth rates with China of 10 - 15 years ago. We are probably where China was 2 decades ago.

Economic slow down for any country is in relation with its own growth rates. Ex: From the chart you presented, the growth rates were above 9% for India and has been steadily decreasing and has reached 4.5%. This is considered slowdown of growth. Growth is still there. however it is slower compared to what it was a while ago and what the potential can be given the right policy inputs.

tvsh,

absolutely you said it right, we need to compare ourselves with our neighbour China.

As for as your statement that GDP coming down from 9+ to 4+ is not an indication of economic slowdown. I say its policy paralysis of the government which is heading this country. Chinas communist government is very firm on its decisions to take the growth towards public needs(indian Govt spent more money on papers for Common Wealth Games Existing infrastructure Renovation than China spent for the Olympic Nest village). Whereas our Netas makes project to fulfill their needs. Depending on the government which takes bold and futuristic decisions, our growth will be decided.

A simple example is, In shanghai, to decongest the traffic, in one of the busiest main road, china is constructing the sixth line on a elevated Highway( its not just 6 track road, I literally mean 6 track 6th line - each road is one above the other). whereas in our own city, for making a simple flyover or an underapass, our corrupt government system takes an average of 4 years.

When the Government comes out of its political drama, India will develop and its GDP also grows well.

msn1270 wrote:tvsh,

absolutely you said it right, we need to compare ourselves with our neighbour China.

As for as your statement that GDP coming down from 9+ to 4+ is not an indication of economic slowdown. I say its policy paralysis of the government which is heading this country. .

msn1270, Policy paralysis is the cause (along with many others) and economic slowdown is the effect. The economic growth is measured in percentage of GDP growth. Lesser GDP growth compared to previous quarters, previous year, etc. is considered economic slowdown. GDP growth reversing is considered recession.

Once Nandan Nilekeni said in an interview, " we are building flyovers, whereas chinese are building cities ". China has less corruption compared to India. We have to pay 10 % commission for all the developments happening to the politicians in the form of bribes.

Similar to 2008-09, we don't see any mass lay-offs or company closures so far. Every company is giving promotions and Hikes/Increments/Bonus as usual this time. So far no company has reduced salary for any employees. Moreover every month on month India's import index is rising and also people are madly investing/consuming Gold even at this higher price. Steel and Cement Output is steadily increasing compared to last year. Central Revenue Collection for the month of Feb 2013(Rs. 60,000+) is up by 12% compared to Feb 2012(Rs. 54,000+). This doesn't indicate any slowdown in the Money Rotation in our market. Nothing has come down in general except some agricultural commodities due to drought/lack of rain in certain areas of India. I Feel Its pre-mature to call any slowdown as of now.