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Auto industry’s growth story about to collapse: Tata Motors CEO & MD

SIAM (Society of Indian Automobile Manufacturers) convention: Guenter Butschek, CEO Tata Motors said Indian automobile industry growth story is about to due to ongoing slump triggered by a variety of factors, including low consumer sentiment and non-availability of liquidity. 

While reporting the 20% fall the auto segment during the period of April-August 2019, he said “We all know it. As far as the car industry is concerned, the growth story is about to collapse,” he said. He was speaking on the background of passenger vehicle sales touching 19 years low.

Sales of trucks crashed by 60 per cent in August with Ashok Leyland registering a fall of 70 per cent in high tonnage trucks. The company has announced a five-day holiday at one of its plant starting Friday.

Further pointing out the confusion within the industry on GST, he said we need to have inclusive and clear thoughts. He also added that ICE and electric vehicles should be seen as the evolving technologies rather positioning enemy of each other.

Low economic activity leading to depressed demand, triggered by the liquidity crisis and the increase of the axle load regulations for commercial vehicles and uncertainty in the minds of consumers have severely hurt the sector.

However, automobile manufacturers are taking steps to overcome the challenge by adjusting production to demand.

Butschek said, “Block closure has become the word of the year”.

Pawan Goenka of Mahindra & Mahindra said “As an industry we need to remove confusion in the eyes of the consumers. There is an unfounded fear. will BS-IV will be banned? Electric vehicles will become cheap. There is a lot of confusion to be cleared.”

Venu Srinavasan, Chairman, TVS Motor Company said, “We have been seeing the cyclical downturn across the globe. However in India, it is more steeper.. In the last twenty years we haven’t seen prolonged downturn. In the last two years, two wheeler prices have risen 35 per cent up because of safety norms, insurance cost and high GST.”

Emphasizing on the improvement on the current situation, he added that “there is no tomorrow without today. We need to change the perception of the auto industry.

Read More: Auto industry unanimous on its demand for immediate GST reduction on automobiles to 18%: SIAM

 

Author: Niranjan Reddy

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