59th SIAM  Annual Convention Live: GST Rate Cut Alone Can’t Revive Demand For CVs, Says Pawan Goenka
Employees work on the assembly line for Mahindra & Mahindra Ltd. XUV 500 sport utility vehicle at the company’s factory in Chakan, Maharashtra.(Photographer: Kuni Takahashi/Bloomberg)

59th SIAM Annual Convention Live: GST Rate Cut Alone Can’t Revive Demand For CVs, Says Pawan Goenka

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Shared Mobility Is A Structural Change To Auto Industry: Uday Kotak

Automakers must be aware of a “structural change” affecting their demand as the younger generation is opting for shared mobility companies such as Ola and Uber. That’s according to Uday Kotak, executive vice chairman & MD of Kotak Mahindra Bank.

" A car was a status symbol when I started my career," said Kotak, addressing the gathering at the convention. "But my son is more comfortable with Ola and Uber which is a classic example of capacity utilisation."

Also Kotak said abolishing state-wise levies (through GST), axle-norm tweaks and better roads have made trucks “more efficient” and impacted demand.

Other Highlights:

  • Enough liquidity in the banking industry to finance vehicles.
  • Automakers having a consumer-finance arm is an option to trigger demand.
  • Credit scores are also impacting lending and borrowing thresholds.

GST Rate Cut Alone Can't Revive Demand For CVs: Pawan Goenka

The problem of auto slowdown could be ‘more severe” for commercial vehicle and a rate cut in Goods and Services Tax cannot revive demand. That’s according to Pawan Goenka, managing director, Mahindra and Mahindra Limited.

The problem could be more severe in commercial vehicle, where a GST reduction alone couldn’t be able to revive the demand. For that, overall economy needs to revive.

Other Highlights:

  • M&M’s normal growth expectation is 8-10 percent growth and the number is now -20 percent.
  • Bharat Standard VI engine switchover is a major disruption.
  • Don’t anticipate any production cut for this month; may adjust production in October.
  • Will defer about Rs 800-1000 crore of planned capacity expansion for this year.

Need Quantitative Easing To Overcome Cyclical Downturn, Says TVS Motor's Srinivasan

India can afford to breach its fiscal targets in order to support the slowing economy and generate employment. That’s according to Venu Srinivasan, chairman & managing director, TVS Motor Co.

"Quantitative easing is required. We need to increase the fiscal space even if targets are not met in the short-term." said Srinivasan in an interview with BloombergQuint. The cyclical slowdown can be overcome with “palliatives” such as significant investments in rural infrastructure and affordable housing, he said.

A bit of fiscal easing can be accommodated as inflation is quite low.
Venu Srinivasan, Chairman & Managing Director, TVS Motor Co.

Auto Industry Needs Support, Says Nitin Gadkari

Nitin Gadkari, India’s transport minister, acknowledged the need to support the country’s auto industry today, saying he has made suggestions to the Finance and Commerce Ministries regarding incentives that can boost auto exports.

  • Government concerned about slowdown that impacts employment potential, growth of the country.
  • Government will not ban diesel or gasoline vehicles.
  • Rise in crude oil remains a concern for economy.
  • In three months we are looking to award Rs 5 lakh crore worth of projects.
  • Suggests auto companies to start financing arm.
  • Will work with finance min to cut down on GST rate.
  • Auto industry needs support now.
  • Have suggested commerce and finance minister to offer incentives to boost export.
  • Have proposed introduction of auto export incentives to Finance Minister and Commerce Minister

Automotive Industry At Crossroads, Says SIAM President

India’s automotive industry is at crossroads, SIAM President Rajan Wadhera said at the convention today, adding that investment is need for the hour.

“There needs to be investment as the industry is moving towards cleaner fuel and at the same time we need affordable vehicles,” he said.

Other Highlights:

  • Vehicle demand has slowdown significantly.
  • OEMs are cutting down production days and nearly 15,000 people have lost their jobs.
  • Automotive Component Manufacturers Association of India estimates that million jobs are at risk.
  • Welcome the assurances by government and incentives offered by the Finance Minister
  • With implementation of BS-VI, price will increase and so will the GST earnings.
  • We request the government to cut down GST rates.
  • Hope restrictions imposed on specific vehicles will be removed.
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