Chennai: The current slowdown in the automobile industry might affect investments and economy in the long run, if the trend continues for more than six months, a top industry official said on Wednesday.

"The slowdown in July (15 per cent drop in the industry growth) was bad. I am hoping that it is for short term... It may be for two or four months... But if it goes beyond six months, I think it will affect investments," Mahindra and Mahindra Automobile and Farm Sector President Pawan Goenka told reporters here.

Goenka, who also heads the Society of Indian Automobile Manufacturers (SIAM), said the current focus should be on reducing the manufacturing cost as it was becoming a concern.

Stating that a leading Indian component manufacturer has decided to set up a manufacturing facility overseas and export products to India, he said if this trend continued in long term it may affect the economy significantly.

"The company has planned to set up the new plant outside India because it has found it cheaper ... this is a very dangerous trend. If it continues, then manufacturing may go out of India and if that happens, the economy would be affected. This is something we need to focus now," he said.

Goenka was here to announce the 16th edition of Asia Pacific Automotive Conference (APAC) which is to be held in Chennai next month.

The three-day event would begin on October 6 at Chennai Trade Centre. It would be an ideal platform for exchange of ideas on engine technologies, green vehicles, safety, automotive infrotronics, frugal engineering among others.

After unveiling the logo for the conference here, Goenka said the automobile and auto-component industry's target of reaching USD 145 billion by 2016, was well "within the reach".

"We had a vision of reaching USD 145 billion by 2016. Now it is well within reach... may be little earlier... we may reach the target," he said.

Goenka, who is expected to step down as SIAM's President in a week, to head the Automobile Component Manufacturing Association, said by 2016 the number of persons employed in automobile or automobile component industry is expected to reach 25 million from the present 13 million.

(Agencies)