The second hand cars market has suddenly seen a spike in the demands. Thanks to the rising prices of oil and the budget-taming high interest rates. In all this mayhem that is causing the stock markets to tank, the automobiles which are fuel efficient are able to entice the demand. The rest, so called €cars for the big guys'; have seen a sharp slowdown in their demand.

70% of the new car sales in India are done through the finance route. Thus even a small rise in the rate of interest is bound to affect this market significantly. The automobile industry in India has seen a phenomenal rise in the last couple of years, posting a cumulative growth rate of 30%. This has led to the growing presence of foreign auto makers in India. The automobile market in the first world countries has all but stagnated. The recession has taken its toll on both the steel and auto making industry. Hence, these multinationals are increasing their footprint across the globe in order to sell to sell their surplus.

India is being touted as the economy of the 21st century; hence major auto making companies are making a bee line to open their shops in India. The growing Indian middle class, which is also the consumer class, provides tremendous opportunities for auto makers. Not only this, in order to cater to the Indian market, indigenous companies also are taking great strides by acquiring iconic brands and making them available to the Indian customers. Even imported second hand cars have a great demand with the elites of the country, many of them considering it as a coveted possession. Precisely for this reason, the businesses that rely on second hand car sales are doing well.

The red tape surrounding the importing of these cars has been lowered to a great extent, further enabling the customer to lay their hands on machines that were hitherto unattainable. The acquisition of Jaguar and Land Rover by Tata Motors and the Korean automaker SsangYong by Mahindra and Mahindra is a case in example.

With all these high profile activity in the market, how the market leader could be left behind. Maruti Suzuki is directly importing some of its model from Japan; the cost of such vehicle is a tad higher in comparison to vehicle made in India. But the Indian consumer has evolved and is demanding more and more of the featuresof the international standards. Thus, the decision by market leader Maruti should be seen in this context.

Although the future prospect for the automobile industry is bright in the long term, the present doldrums is just a phase that will ease out with the recovery of the financial market.