Its not Just in India !!!!!!!!...........

Bolivia parlament 

Ukrain parlament 

Who Holds the Key For Passenger Car Companies????

Below table shows the number of people owning cars in some of the important auto(car) markets world-wide. 

# The Economist 13th Nov '08

With US almost saturated at 800 owners per thousand and with the present recession condition expected to prolong for an year or two, has the least potential along with Europe and Japan. The so called BRIC holds the key for auto (Car) companies.  If Russia can withstand the present economic crisis, it can fare better. But economy is under tremendous pressure, because it depends heavily on crude oil revenue which has fallen to rock bottom of 31 $ per barrel recently.  Worst part being economy is expected to contract by 0.2% in 2009 as per Guardian of UK. Earlier the economy comes back on track brighter the future.

Brazil holds good potential but in the long run it is going to be China and India, with only 30 and 7 car owners per 1000 people respectively.  Moreover both have population of over one billion and these economies are expected to perform best in 2009 among large economies. The reasons being china has already announced almost $600 billion stimulus package to prop up the economy and India with vibrant domestic market and export forming only 20% of GDP, makes them the best bet in the long run.

Reasons for Inflation at Global and Indian context in 2008

Inflation may be a result of two factors i.e Cost lead or Demand lead or both. 

Global inflation is mainly cost lead but in Indian context it is both.

What is Cost lead ?

Inflation due to increase in cost of production, this may be due to increase

in wages and salaries or increase in raw materials cost.  

What is Demand lead ?

Increase in prices of commodities that consumers purchase due to increase

in overall levels of quantity demanded. When the companies cannot increase

the production significantly to offset the increase in demand, this leads to
increase in price and in turn inflation.

Global Scenario

In the Global context it is mainly commodity lead inflation that is raw materials like 

Metals- copper, steel, aluminum etc.

Crude oil and its derivatives-petrol and diesel etc..

Indian Scenario

In case of India it was Cost lead and Demand lead. As the crude and metal 
prices were sky rocketing it was inevitable for business firms to withhold from
passing on this increase to the consumers. This is visible in prices of manufactured 
outputs like steel, cement, and other kinds of house hold items manufactured from 
them. Crude oil which moved from around 55 $ per barrel in April 2007 to 100 $
in April 2008 and was hovering at around 145 $ per barrel in July 2008. 
Since crude oil is the essential commodity linked to the price off all goods and services
produced in today’s market economy. This lead to increase in prices of almost all goods 
and services. Between 2004 and 2008 Indian economy averaged GDP growth rate 
of more than 8% and consequently higher levels of income. This increase in income
lead to higher levels of commodity price and inflation.So when we look at Indian 
context of inflation it is the result of demand and cost lead inflation.