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Wednesday, August 12, 2020

SS Kim: ‘Credit availability, measured scrappage policy, cut in GST or personal I-T will help spur demand’

He called for a cut in GST rates or relief on personal income tax so that there is more money with consumer to spend.

Written by Sandeep Singh | New Delhi | Updated: July 8, 2020 4:50:26 am
SS Kim, MD & CEO, Hyundai Motor India

As the industry is coming out of lockdown and settling down with its entire ecosystem around production and sales, Hyundai Motor India expects revival in festive season and normalcy by early next year. SS Kim, MD & CEO, Hyundai Motor India, told Sandeep Singh that while credit availability to dealers would help, a measured scrappage policy will help spur demand. He also called for a cut in GST rates or relief on personal income tax so that there is more money with consumer to spend. Edited excerpts:

Do you think the current dip in sales, production and industrial activity will have a medium term impact on employment generation within the sector, sustainability of MSMEs and supply chain?

India is one of the fastest growing large economies in the world. It is also a young economy with a robust domestic demand, high savings rate and regulatory mechanisms which makes it a resilient economy. Over recent decades, supply chains have globalised, specialised and become leaner or just-in-time. However, the pandemic has got manufacturers to re-evaluate their supply-chain dependencies and minimise risks which will benefit them in the longer run.

How do you see the government’s lockdown response to Covid-19 and decision to unlock in stages? Do you think the government needs to do something more for sustained recovery?

We support the government’s decision in response to this unprecedented global crisis and applaud their efforts in the fight against pandemic.

Keeping the health and safety of everyone as priority, unlocking industries in stages was an important step for economic recovery. For the growth and recovery of auto industry in specific, we are working with the government through SIAM with key focus areas. First and foremost is credit availability for our dealers. Some relief measures for the MSME sector have been announced as a part of the stimulus package. Secondly, we believe that the government would consider a measured scrappage scheme that would spur demand. The third major aspect is taxation where the government can spur demand. A cut in GST to reduce prices or relief on personal taxes can leave more money in the consumers’ hand.

How do you see the pandemic changing the way Indian automotive industry operates?

The auto industry has no doubt been impacted like every other sector. In India, it is expected to realign in different ways to meet customers’ expectations. Manufacturing process and supply chain will see changes in the near term as companies will focus on reducing dependencies. Over the past two decades, automation in manufacturing has been transforming factory floors and the nature of manufacturing employment. Today, we are on the cusp of a new automation era: Rapid advances in robotics, artificial intelligence, and machine learning which are enabling automobile manufacturers to create products that are safer and more environment friendly without compromising on performance. We have already adopted automation and digitisation in an evolved way.

Do you see a shift in consumer preference and how are you working around that?

Consumer preference will be more towards individual health, hygiene and cleanliness during travel. Post the pandemic, we expect consumers to switch more towards personal mobility. We believe there will be an increase in traction for the compact and used car segments. Customers are now showing inclination towards car sales online and our ‘Click to Buy’ platform has recorded 1.5 million visitors, with over 1,900 online vehicle bookings since its launch.

While June sales numbers were significantly higher than May, they are still half of previous year’s numbers. How do you see the recovery for yourself and the industry?

The market has been highly resilient in challenging conditions and will be quicker to overcome the adversities than other countries. We believe the market will see some revival in the festive season and will head towards normalcy early next year. In an extremely challenging market, Hyundai has made a reasonable beginning towards normalcy. In June, we registered cumulative sales of 26,820 units. We are witnessing significant demand from the recently introduced models like the all-new Creta and the new Verna. Additionally, our brands like Venue, i20 and NIOS are also witnessing high customer traction.

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