Auto sector problems-what can be the way forward?

A lot of people have given public statements about the recent decline of the automobile sector including Hon'ble Minister of Finance and Chairman of Maruti Suzuki. But there are a few factors which do not seem to have been highlighted.
1. Capacity utilisation in automobile sector has been quite low for a few years already. While 4 car manufacturers have capacity utilisation of 85% and above, most of the others have capacity utilisation of less than 50% and some less than 20% (2015-16 figures). This cannot be called healthy under any circumstances.
2. As a whole India has only 22 cars per 1000 people compared to world average of 170 while high car using countries have much more (USA 800, UK 500+). Even China which is much better off economically compared to India has only 70 cars per 1000 users. On the face of it, it appears there is a lot of room for growth. However there are other issues to be looked at.
3. Though urban India has a better car population (around 70 per thousand population), the affordability in general is not high and room for growth is little. With financing restrictions, controls on cash use for car purchase (read black money) and job losses in IT sector, demand for cars has reached saturation. In general the projections made around the famous Indian 'middle class' have not materialised in any sector. Though cost per litre of petrol is comparable or even lower compared to USA/Europe, purchasing power of Rupee makes running costs quite unaffordable for the average user.
4. Pollution, congestion (and resulting low performance), urban parking problems and forex outgo leave a big question mark on the future of petroleum based cars in India. Putting more cars on the road will worsen these problems. The government is pushing for replacing petrol/Diesel cars with electric variety. In fact given the high population density of our inner cities, cars of any kind will only add to our civic distress.

The writing on the wall has been quite clear for some time already. So what could have helped this sector?
1. All the big car manufacturers had been working for more than a decade to put electric cars in the market in addition to the existing range. Apart from Tesla which is a pioneer in electric cars, other biggies like Mercedes, BMW and Audi have already been selling their electric cars for more than 5 years now. Indian auto makers never ventured into this field. At least Tata Motors which is solely Indian owned could have made an attempt. Nano would have been an ideal city car platform to start off this attempt; but sadly, not done.
2. Another missed opportunity is the hybrid electric car which in cities can save almost 30% fuel and reduce pollution. Ever since Toyota came out with their first hybrid car Prius in late 1990s, several manufacturers have offered this option and all over the world people have adopted hybrid cars for everyday city use and as taxis. Unfortunately, Indian manufacturers are still waiting for the lead from their principals.
3. Research in India is much less expensive and manufacturers might have funded the government labs in this sector to come out with local designs of hybrid/electric car drive systems for adoption.
4. Given that 100% capacity utilisation is going to be a problem now and in future, manufactures with overseas principals should have found means to increase their export business. Some are already exporting a good part of their production but more may be called for. Quality control should take priority as users in other countries are much less forgiving of issues unlike Indian users.
5. And lastly, car manufacturers may have to diversify into related fields where their infrastructure may find use. But that is a matter for their own corporate planners to think about. more