A Good Mon­soon Will Trig­ger In­vest­ments

The Economic Times - - Money -

To be a part of the In­dian au­to­mo­tive in­dus­try for four decades has been a very re­ward­ing jour­ney, feels Padma Bhushan awardee R C Bhar­gava, chair­man, Maruti Suzuki. In an in­ter­view to ET NOW, he talks about the is­sues, es­pe­cially pol­lu­tion, dog­ging the in­dus­try. Edited ex­cerpts:

Is­sues Auto Sec­tor is Fac­ing The en­tire au­to­mo­tive sec­tor con­trib­utes 47% to the to­tal man­u­fac­tur­ing ac­tiv­ity in In­dia. In terms of bring­ing new stan­dards of qual­ity and pro­duc­tiv­ity and man­u­fac­tur­ing prac­tices, the au­toin­dus­try has al­ways been in the fore­front.

Un­for­tu­nately in In­dia, many peo­ple are con­fused about pol­lu­tion and the causes of pol­lu­tion. In In­dia, the big­gest is­sue is dust, par­tic­u­larly the PM 2.5 level of dust. Be­cause of that the auto in­dus­try is fac­ing chal­lenges which are pos­si­bly go­ing to hurt its growth. Bumpy Ride Ahead We have never had a lin­ear curve be­cause there have been ups and downs al­ways. I think they will con­tinue, but this present chal­lenge I think is a new man-made chal­lenge, be­cause it arises largely from peo­ple’s pre­set ideas and prej­u­dices. It is not based on facts. If you look at the re­port of IIT Kan­pur, it clearly brings out that cars con­sti­tute just about 2% of the PM 2.5 loads in Delhi’s air. Just 2%, but if you hear peo- ple talk, you would not be­lieve that.

Im­pact of Good Mon­soon Each time there is a good mon­soon in In­dia, the econ­omy picks up, in­fla­tion comes down, ru­ral sales take off and it is a win-win for every­body. One of the re­quire­ments for in­vest­ment-led growth is a pick-up in the de­mand for prod­ucts and there are lot of unutilised ca­pac­i­ties. What the mon­soon will do is to bring about pick-up in the de­mand, and once that hap­pens, then there will be bet­ter ca­pac­ity util­i­sa­tion, in­ven­to­ries will run out and it will lead to an over­all cli­mate where peo­ple will be more pre­pared to make in­vest­ments.

Maruti Suzuki’s ru­ral per­for­mance In 2015-2016, the rate of growth of sales in the ru­ral ar­eas had slowed down sub­stan­tially. We were grow­ing be­fore this at about 22-24% in the ru­ral ar­eas. The growth in this last year has halved to that. I ex­pect with a bet­ter mon­soon it’ll pick-up.

Change is Con­stant The suc­cess of any com­pany de­pends on its abil­ity to fore­see changes and to adapt in time. Whether it is stricter emis­sion stan­dards; whether emis­sion stan­dards will lead to­wards hy­brid cars or elec­tric cars, these are all is­sues which the in­dus­try is fac­ing to­day and will have to take a de­ci­sion which way we are likely to move.

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