Stable Policies & Long Term Roadmap Are Vital Stimuli For Auto Sector
As India celebrates its 70th year of Independence, the auto industry is of the firm opinion that it will be able to relish its ‘real freedom’ only once a long term roadmap, shorn of any obstacles, is laid out for them by the government.
Most of the automakers have unanimously maintained that policy stability and predictability are important pillars of its sustainable growth. Without them, there is a lot of uncertainty in the industry as OEMs are not sure where, how and when to deploy their resources.
Vishnu Mathur, Director General, Society of Indian Automobile Manufacturers (SIAM) told BW Businessworld, “What the automotive industry really wants is a long term roadmap on technology and regulatory standards. We would really appreciate if the government is technology agnostic in its approach and doesn’t favour one over another. We are not averse to any groundbreaking technology and believe that its acceptance should be best left to the consumers. Moreover, all policy decisions should be based on a proper data research and analysis. If these aspects are looked at (by the government), the investors’ level of confidence will improve massively.”
It may be recalled that during the last few quarters, the domestic auto industry had a turbulent phase due to certain knee-jerk reactions like the Supreme Court ban on registration of diesel cars and SUVs with an engine capacity of 2,000cc and above in Delhi and NCR, no registration of BS-III vehicles from April 1, 2017 onwards, etc. Of late, the sales of SUVs and luxury cars might hit a speed breaker due to the possible hike in cess by 10% under the revised tax regime.
In his address to shareholders in the company’s annual report 2016-17, Kenichi Ayukawa, MD, Maruti Suzuki stated, “One of the important lessons we learnt last year was that the business environment is becoming more and more uncertain and that the organisation has to be strengthened further to deal effectively with such unanticipated disruptions. "
R.C. Bhargava, Chairman, Maruti Suzuki and an auto industry doyenne told BW Businessworld, “The auto industry was unshackled in the year 1991 when the liberalisation policy was announced by the government. Now our industry is the least restricted one with any global player allowed to set up its base here. Although the government policy plays an instrumental role in shaping up the industrial ecosystem, it is not the end all and be all. Rather than just criticizing them (government) over its policies, the industry players need to reinvent themselves in terms of product development, manufacturing processes, the emancipation of workforce, etc.” He further added, “Look at how other developed countries such as Japan, South Korea, Germany, United States, etc. have revolutionized the automotive and its allied industries. It was possible because all the stakeholders such as the government, industrialists, employees, etc., have worked together as partners there. But in India, one stakeholder doesn’t trust the other and vice versa as there is an element of scepticism all around. Although our current government is playing an active role to streamline the whole process, everyone has to work in harmony.”
Dr. Wilfried G. Aulbur, Managing Partner, Roland Berger India stated, “The key challenge for the automotive industry is a structured industry policy that is well thought through and detailed and that focuses on local capability development in areas such as electric vehicles. This policy needs to be stable and implemented consistently.”