New Delhi: At a time when the economy is said to be galloping towards becoming the third largest in the world, passenger vehicle sales have seen the lowest growth in the last four years with a fall to 2.7 % for fiscal 2018-19.
In a freewheeling interview - Vishnu Mathur, Director General of Society of Indian Automobile Manufacturers (SIAM), spoke at length to ETV BHARAT on a range of issues afflicting the automobile sector today. SIAM is a not for profit apex national body working for the enhancement of the competitiveness of the Indian Automobile Industry.
In the interview, Mathur stated that automobile sales will pick up after the completion of the election process and especially in the second half of the current fiscal. He is also of the opinion that the automobile industry got benefitted by the Goods and Services Tax (GST) through input credit mechanism.
Excerpts from the interview -
On implementation of BS VI norms
Speaking on whether the new emission norms would lead to phase out of the current vehicle models, Mathur said it would depend on whether a company wants to continue production or discontinue or wanted to upgrade.
The upgradation of engines to meet new emission norms would come at a price. The upgradation cost would itself lead companies to choose on phasing out old models or produce new models at new price points. This would definitely add to the costs. Hence, it is expected that customers would enter pre-booking before the BS VI norms came into play in the second half or the last quarter of the current fiscal.
On idle capacity
On whether the idle capacity in the industry had increased as the latest IIP figures for February showed a drop to 0.1 percent, which is the lowest in last 20 months, he said that the credit offtake has staggered despite the recent back-to-back reduction in key interest rates by the Reserve Bank of India (RBI). The passing on benefits of low interest rates took time and is expected to gain further momentum in the coming quarters.
On subdued rural demand
On whether there had been a lull in demand from the rural hinterland which is one main source of demand in the economy, Mathur said he does not see it that way. He said that the auto sector was one of the main engines of growth driving the Indian economy.
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