Indian Auto Industry’s Growth Story About To Collapse, Says Tata Motors MD
Guenter Butschek, chief executive officer of Tata Motors Ltd., attends an earnings news conference in Mumbai, India. (Photographer: Dhiraj Singh/Bloomberg)

Indian Auto Industry’s Growth Story About To Collapse, Says Tata Motors MD


Indian automobile industry growth story is about to collapse due to the ongoing slump triggered by a variety of factors, including low consumer sentiment and non-availability of liquidity, Tata Motors Ltd. Chief Executive Officer and Managing Director Guenter Butschek said.

Speaking at the annual convention of Society of Indian Automobile Manufacturers, Butschek, however, said he was cautiously optimistic about a recovery from the current situation on the back of measures announced by the government.

"Let's actually take it in a very dramatic way and let's conclude, the Indian automotive growth story is about to collapse," he said.

Later on clarifying his statement on the sidelines, he said, "I have seen the statistics published by the entire automotive industry in the first quarter, then the continuing statistics provided on wholesale in the month of July, August. I didn't say it has collapsed, it's about to".

Low economic activity leading to subdued 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, he added.

Stating that 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".

Also read: August Auto Sales: Bajaj Auto Declines 11%; Ashok Leyland Drops 47%

Welcoming the recent steps taken by the government, Butschek hoped for things to turn around, although the road ahead is still challenging.

"I am cautiously optimistic that the worst is behind us," he said, however, added that there were lot of uncertainties related to BS-VI emission norms transition and how it could impact overall demand.

He said the recent slew of measures announced by Finance Minister Nirmala Sitharaman will help the auto industry.

Yet, he said, "in order to get out of the current crisis and not miss the festive season, we require clarity from the government, here and now, on Goods and Services Tax and scrappage policy".

Also read: M&M Defers Rs 1,000-Crore Capex Plan By A Year

BQ Install

Bloomberg Quint

Add BloombergQuint App to Home screen.