Policy stability important: Maruti MD

The country’s largest carmaker Maruti Suzuki India (MSI) has said policy stability and predictability are important to nurture industry ecosystem as business environment is becoming more and more uncertain.

While the “fast changing regulations have also created a dynamic business environment”, Managing Director and Chief Executive Kenichi Ayukawa said, “the auto industry is a policy sensitive one, and a change in regulation can have far reaching impact on our growth or direction of technology and manufacturing”.

In his address to shareholders in the company’s annual report 2016-17, Ayukawa said: “One of the important lessons we learnt last year was that the business environment is becoming more and more uncertain, and that the organisation has to be strengthened further to deal effectively with such unanticipated disruptions”.

Describing 2016-17 as a “dynamic and eventful year”, he said: “We had our share of challenges in the form of short-term disruptions in operations caused by fires at two of our key suppliers. Also, there was some initial uncertainty after the demonetisation. Despite these unanticipated events, our share inched up and we were able to welcome more and more customers.”

Calling for consistent policies, Ayukawa said: “Policy stability and predictability are important to nurture the industry ecosystem. It helps industry gain efficiencies and get clarity on which targets and technologies to work on. We are working with the government in thinking of policies that can make our cars safer, cleaner and more beneficial to the consumer in the Indian context.”

In 2016-17, the auto industry had to face uncertainties such as the Supreme Court ban on registration of high-end diesel cars and sports utility vehicles having engine capacity of 2,000cc and above in Delhi and national capital region, and sales of BS-III vehicles. Big cars and SUVs are now facing possible hike in cess under the new tax regime with the GST council recommending increasing the maximum ceiling to 25 per cent from 15 per cent over and above the top tax rate of 28 per cent.

Chairman R C Bhargava, while welcoming the government’s decision to promote electric vehicles, said the company “would not hold back in introducing EVs as soon as we determine that the customers are ready to buy them”.

“AUTO INDUSTRY IS A POLICY SENSITIVE ONE, AND A CHANGE IN REGULATION CAN HAVE FAR REACHING IMPACT ON OUR GROWTH OR DIRECTION OF TECH” KENICHI AYUKAWA MD & CEO, Maruti Suzuki India “WE WOULD NOT HOLD BACK IN INTRODUCING ELECTRIC VEHICLES AS SOON AS WE DETERMINE THAT CUSTOMERS ARE READY TO BUY THEM” R C BHARGAVA Chairman, Maruti Suzuki India