Car sales in India saw a major decline last year. A few of the responsible factors are fluctuating car loan interest rates and the increasing trend of used cars. This situation is worrying about steel producers in India. They are turning towards small OEM’s to sell their products now. OEM partnerships are benefiting and giving many opportunities to industries. They are also giving access to new markets.
Bombay Iron Merchants Association’s merchants are supporting this fact. The steel companies are giving 20-30 percent of their volume to OEM’s. Only in the last few months. The pioneers heading the steel game in India are JSW Steel and Tata Steel. They are producing flat steel which is used in making auto steel.
Society of Indian Automobile Manufacturers is saying that since July 2018 car sales id declining. In April, the sales drop was 15.9 percent. Steel prices are still the same. Therefore there is still some hope for steel producers. But, the rate at which they are selling volumes to OEM’s, it can change.
The domestic market is demanding steel products. Hence, steel producers are raising their prices since February. Auto grade steel import is also declining due to a drop in a car sale. Car manufacturing needs specific steel parts. Therefore, only certain segments of the steel industry are facing a hit.
Some important steel products facing the impact:
Dual faced steel sheet, deep joint steel, hot-rolled and cold-rolled coils, and galvanized steel.
Institute of Steel Development & Growth experts are saying that all steel products are not facing the impact. Thus, only parts used in automotive are. The last few months have seen a decline in imports of cold-rolled products from South Korea.
All the steel industry can do is be hopeful. Industrialists are counting on efforts from the government to change auto market dynamics. Therefore, changing their own fate.