The auto industry is witnessing one of its toughest phase,the decline in car sales being the lowest in a decade. In an interaction with Shruti Srivastava,director-general of Siam,Vishnu Mathur,elaborates on the issues plaguing the auto industry.
The car sales figures for the car sales paint a dismal picture. What are the reasons for the decline?
There are a lot of issues. While there is a general slowdown in the economy,high fuel cost,high financing cost,weak consumer sentiments,high inflation has further weakened the sector. Consumers are waiting and watching. It is not easy to sell cars these days.
The sales of SUVs have been very good while passenger car numbers are very weak. What explains this?
Certainly there is a shift in consumption pattern,but sales in the SUV category has also been moderating over the last few months. And we believe that the UV demand will further moderate with the recent Budget proposal of hiking duty by 3 per cent on such vehicles.
Going forward,what kind of growth are you expecting in the sector?
The various policy initiatives started by the government are likely to have a positive impact. The extension of JNNURM scheme for purchase of buses for hilly states is likely to see a growth in that segment. The good thing is that the commodity prices are not escalating. The reduction of duty on chassis of commercial vehicles by one per cent will also help the industry.
What is your forecast for the sector?
For the year 2013-14,the growth is likely to be between 3-5 per cent growth. The cars segment will grow at 5 per while the utility vehicles segment will grow at 11-13 per cent.
Given the state of the auto industry,do you think this is the right time to ink a pact with the EU on free trade?
We are of the view that the FTA with the EU should not include completely built units at all. We dont want a reduction in duty and we have made our position very clear to the government. If the EU can harden its stance on inclusion of auto in the negotiations,why cant India harden its stance against it?