The auto industry might have been enjoying one of its best growth phases ever but there is enough scope to be cautious as well. Notably, almost all the auto majors have announced a hike in their production capacities but analysts believe that the optimism is going leaps and bounds amidst the dangers of a fall in demand.

Be it auto majors like Ford, Maruti Suzuki, Toyota or Honda or the two-wheeler majors like HMSI, Hero Honda or Bajaj Auto, all of them have stepped up pressure on the gas pedal to increase their respective capacities for the increasing demand.

While Toyota is manufacturing a new facility at its Bangalore plant, Maruti Suzuki is planning to add another line to its assembly. On the other end, Hero Honda and HMSI are looking at opening a new plant altogether.

Notably, M&M recently inaugurated its Chakan plant which is capable of producing all M&M's automotive products under one roof. However, the increasing chances of loans getting more expensive and arrival of BS-IV may stand as a hurdle in the growth of the automotive industry.