Finance Minister’s announcement related to the investment of Rs1 lakh crore on infrastructure in next 4-5 years is a positive thing for the auto industry as if implemented it will give a boost in sales of commercial vehicles like trucks and pick-ups, says Pawan Goenka, managing director, Mahindra and Mahindra. In an interview with Swati Khandelwal, Goenka said, “Overall sentiment is the main culprit of this slowdown; however, liquidity crunch is also a factor for it.”

Has the demand scenario improved post the recent announcement by the finance minister or you are still waiting for it to happen?

If we have a look at August month’s performance, then there has been a negative growth and the month’s performance suggest that it will take a few more months to recover. The most important outcome of the announcement is related to financing cost reduction, which is not out yet and I hope, and it is a need of the hour that the announcements related to liquidity and EMI reduction through finance rate cut must happen. And, if it is not implemented in the next 7-8 days, then our festive occasion will also come to an end. So the implementation of the announcement is the need of the hour, which will bring a positive change.

Don’t you think that people should buy new vehicles because the prices will go up in time to come due to BS-VI emission norms rollout?

Clarity has been given that people will not face difficulties while using BS-IV vehicles after BS-VI is rolled out. Again, the best time to buy is right now because the ongoing discounts will be phased out if there is a growth in vehicle sales in the fourth and pre-buying starts. The best discounts are available in the market at present and thus this is a right time to buy a car and I hope that the customers who are sitting on the fence should decide that this is a time to jump in and buy the car.

 Can you provide any data on the quantum by which vehicle prices will be increased after BS-VI rollout?

It will increase in three cases and they are (i) fuel prices- oil companies are saying that they will have to recover the investments, so I have heard that the fuel cost will go up by Rs 1 or 2, (ii) Fuel efficiency of the vehicles, normally, with BSVI will come down slightly and this means that the running cost will go up slightly but that will not have any major effect and (iii) cost of the vehicle, but I can’t provide the numbers at present as we haven’t decided on it yet however, it will be less than the cost that we assumed three-years ago because the frugal engineering, for which India is considered, suggest that the delta cost will be below the initial estimates but yet it will be a substantial increase, especially for diesel but it will be lesser for petrol.

Update us on Mahindra & Mahindra-Ford joint venture?

We have signed a contract for C-SUV, which will be a common platform for Mahindra and Ford, however, it will be separate for both vehicles but on a common platform. It is being developed by Mahindra. One of our engines, namely 1.2-1.5 litre will be used in Ford’s vehicle and that is once again a product of Mahindra. Currently, we are looking at Ford’s platform where a new vehicle will be designed for each, Ford and Mahindra, separately, and that will be again a common platform. Similarly, the electric vehicle based on Aspire will be developed as a Mahindra-branded electric vehicle. Thus, we are working on several projects and we are also working on a connected vehicle. And, everything is that whatever we have announced, when we first signed the MoU nothing has been dropped. Five out of six have been almost finalised, three are announced, two are more like finalised.

When the first product will be launched with them?

In 2022.