Government only talked about supporting auto industry, no action taken: Maruti Suzuki chief
Maruti Suzuki India Chairman RC Bhargava said on Wednesday that although many statements were made by government officials supporting the auto industry, no real action has taken place.
Speaking at the 61st annual convention of the industry body SIAM, the veteran industry leader noted that the automotive sector in the country is at a very crucial time with fortunes declining in recent years and that ‘It would also not resume with conventional motor vehicles, CNG, biofuels or EVs, unless the question of the affordability of cars for the customer is addressed.
“We are going through a situation where this industry has been in decline for a long time. And despite various very important people in government, we just heard from Mr. Amitabh Kant (CEO of NITI Aayog) … There were a lot of statements made. on the importance of the automotive industry. But in terms of concrete actions, which would reverse the downward trend, I haven’t seen any action on the ground, ”Bhargava said.
“I’m afraid words will do us a lot in terms of additional sales, but you need real action to make that happen,” Bhargava noted.
He questioned whether this kind of outlook for the industry resulted in the old belief that the auto industry and passenger cars were a luxury commodity, which only belonged to the wealthy.
“Because if mindsets have changed, I think planners, economists, thinkers, writers, journalists, everyone should have been worried a long time ago about what was happening to the growth of the auto industry. ..”, did he declare.
The numbers are there for everyone to see, but no action has been taken to rectify the situation.
“I am sorry to say that there are very few measures taken that could reverse this trend. And that is what worries me,” he noted.
Bhargava said that the automotive industry in India actually became a model industry and started to develop after Maruti was established.
“The policy change to create a public sector company to manufacture cars is not due to the fact that there has been a shift in mindset among planners that we need an auto industry to grow our economy. in order to develop manufacturing, like what happened in the United States or the United Kingdom, or Germany or France or Italy, or Japan or Korea or even China, that sort of thing does not did not happen, ”he noted.
Bhargava noted that the auto industry has grown so much because the people of this country have a great aspiration to own a car, and not because there was a deliberate policy that led to it happening.
“And which again, I think, supports my view that the change in mindset of planners about the importance of the automotive industry and the automotive industry in general, remains confined to words and does not translate into action. .
“The situation today is that if we take into account what has happened in the last 18 months of COVID, already the industry is in fact in decline if you look at the last five years, and how to reverse that “, did he declare.
Bhargava said he supports the fact that Indian customers should get safe and clean vehicles.
“To get these clean vehicles, if we follow all European standards with the costs involved at that time, how can we make them affordable with a much lower level of income that exists,” he asked.
Bhargava said he fully supports Amitabh Kant’s point of view on the importance of switching to electrification.
“I totally agree that we need to move on to electrification, there’s no question about that. But with the decision to move on to electrification, again, the whole question of vehicle affordability electric and I’m talking about four wheels right now, ”he said.
Bhargava said that if the auto industry is to drive the economy and the manufacturing sector, car penetration in India must drop from 25 or 30 per 1,000 to even 200 per 1,000. Millions of cars have to be manufactured every year. .
“Are we sure we have enough customers in India who can afford these millions of cars every year?” Are Income Growing So Fast? Are Jobs Growing So Fast? I think these aspects are often overlooked when we make our plans of what we’re going to do and what’s going to happen, ”he noted.
“We always forgot about customers in the central planning system because the customer didn’t matter… and we still don’t think about customers when we plan. Will customers be able to afford this product or not? Bhargava mentioned.
Giving an example, he said that Maruti Suzuki had to get rid of the Maruti 800 model, which drove the motorization of India, due to new safety regulations.
He further said: “We have seen that small increases like what happened two years ago, and small price increases have resulted in lower growth in the automotive market. The new regulations for BS- VI again added 22,000 rupees to a car, making the car unaffordable. “
Even before COVID in 2019-2020, the auto market fell 18% in India, Bhargava said.
“I don’t think the auto industry would revive with internal combustion engines or with CNG and biofuels or electric vehicles unless we address the issue of the affordability of cars for the customer,” a- he added.