Source: Hindu Business Line
The economic slowdown could be a cause for concern to the automobile industry but Dr Pawan Goenka is quite upbeat about Mahindra & Mahindra's prospects in 2012-13.
“I am still not entirely pessimistic about the road ahead as we have a good product range in our core segments with a robust line-up in the pipeline,” the President of M&M's Automotive & Farm Equipment Sectors told.
The new launches include the mini-SUV, the sub 4-metre Verito (the rechristened Logan) and the Rexton from SsangYong Motor's product portfolio. “Unless the market completely collapses, we will come out fine this fiscal. Our exports are pretty robust too,” Dr Goenka said.
From M&M's point of view, the good news is that the momentum is already in place with the recently launched XUV500. The market response surpassed the company's expectations which meant “there was something we were doing right.”
The current slowdown has also prompted comparisons with the crisis of 2008-09 when things looked pretty grim following the rapid collapse of stock markets across the world. Customer sentiment also took a nosedive and it required timely intervention by the Government to put the house back in order.
“During 2008-09, the fall happened quickly but the revival was quick. Nobody knows what to do this time around as we are getting hit from all directions,” Dr Goenka said. As a result, the auto industry is still not entirely clear how it can get back on track. “The whole ecosystem is collapsing which is bad news. This includes interest rates, inflation, fuel prices, exchange rate, policy paralysis, etc,” he added. And even while global commodity prices are softening, it is of little help thanks to the weakening rupee.
Dr Goenka reiterated that a strong automobile industry was imperative for economic growth. And this is true just not for India but the rest of the world. “The Government should not look at our industry as a source of quick revenue but of sustained growth. Industry needs support to grow consistently,” he said.
Auto companies, according to him, are responsible corporate citizens which are “not out to make a quick buck” at the cost of the nation or customer. “Anything that is reasonable will be done by us. But we have to make money also in the process,” Dr Goenka said.
In his view, the best bet going forward is to forge a stronger partnership between the Government and the auto industry. In tandem, they can look at issues relating to affordable vehicles, cleaner environment, congested roads etc.
In addition, aspects on easing imports of cars from the EU or tighter emission norms can be discussed jointly. “Why do things have to hit us all of a sudden? It is better to work in a partnership and constantly engage in dialogue,” Dr Goenka said.