Just as I reported recently when I wrote about AutoZone posting better then expected earnings, so it appears that there is another silver lining in the US car sales drop.  Unfortunately for us that silver lining is being experienced not here but abroad, India to be exact.  India has seen nearly a quarter rise in it’s car sales of late.  According to http://online.wsj.com/ seems that India is thriving in an otherwise down market:

“India’s local car sales posted their biggest percentage gain in two years in February because of an improvement in retail financing and of a lower sales base in the year-earlier period.

Sales rose 22% to 115,386 cars from 94,757 a year earlier, data issued Monday by the Society of Indian Automobile Manufacturers showed. The sales growth is the first since September 2008 and the highest since February 2007.”

Apparently a good deal of this upturn was in response to a rate cut by the central bank, but much of it likely comes from the fact that India can simply produce cheaper cars then outside competition.  Even foreign auto makers producing cars in India are likely doing so at a discount in labor prices thus enabling them to make sales at lower costs relative to outside competition.  The sad fact is that America will have a very difficult time selling cars in two huge markets, India and China, because our union labor rates make cheap cars an impossibility for the most part.  Bad for us, good for them.

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