The Hindu Business Line : `Northern auto cos upbeat on biz prospects'

THE automobile and auto components industry with units in North India has expressed optimism about the improvement in business prospects in the next six months.

This has been the finding of a business perception survey for auto and components industry carried out by PHD Chamber of Commerce of India (PHDCCI) for units located in North India.

The survey showed that despite the hurdles which come in the way of doing business in the North, a majority (60 per cent) of respondents did not agree that they would have done any better if they were located in the South. Hence, they prefer to continue their operations and expand from the current location rather than relocate to the South, which is generally perceived to have a more professional environment. The business confidence displayed by this sector is borne out by the fact that around 60 per cent of the respondents expect a growth in sales during the next six months.

Another 20 per cent expect to retain their sales margin. Only around 20 per cent expect lower sales in the coming months.

The companies are also upbeat about their future exports prospects with almost every company predicting a higher or same level of exports. According to the survey, while the majority (around 70 per cent) described the prospects of business improvement in the next six months as average, a significant 30 per cent expect an improvement in general business prospects over the next six months. However, none of the companies surveyed thought that the climate would worsen.

An upturn in business sentiment was also evident as 62 per cent of the respondents are contemplating fresh capital investment in the existing units in the coming months.

The survey revealed that among the factors that come in the way of development are infrastructure and power remain the most problematic areas.

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