Policy makers need to view if auto sales should drive growth, jobs: RC Bhargava
The past year has seen a lot of changes including the massive switch over to higher safety and emission standards…
This year was a year of uncertainty and created a lot of issues for a lot of people, I think. We have stopped BS-IV production completely. We have 3-4 days of BS-IV stocks and two months to sell it. We are okay. But in the industry, last month, dispatches came down by 12% because they didn’t have enough BS-VI cars. If you send too many BS-VI cars, there would have been the question of unsold inventory. So, they had to pull back. I think even in February it will have some effect of that.
How do you see the coming year panning out for the automobile industry?
We have reached a stage where the policy makers need to take a view on whether cars should be a major driver of the growth of manufacturing and jobs, or should we (the country) rely on some other products for this. Because of high taxes, the last decade has seen the car industry growing at what about 7%, which is nothing. Manufacturing industry has not grown much faster either.
The cost of cars went up a lot in the last few years because we have gradually been complying with these emission and safety standards, which are now at European levels. All of those have been added to costs… If you want the car industry to grow faster, to drive manufacturing, create employment… look at the elasticity of demand, purchasing power of people, look at the appropriate level of tax to get the kind of growth we should have. Single digits will not work for us.
What kind of growth are you expecting in FY21?
The next year will be better than this year. The industry is likely to grow in mid-single digits.
How do you read the future of electric vehicles in India?
Besides infrastructure, we need to have components also available, made in India at the right price. Where’s the battery? There’s no battery manufacturer in India, except what Suzuki is trying to do, which is a much higherprice battery essentially meant for hybrid cars. How do you make an electric car or even electric two-wheelers in large numbers without battery production?