The Hindu : Business : Auto units seek corrective measures to check sluggish growth

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Auto units seek corrective measures to check sluggish growth

Sandeep Joshi

Sector reeling from high interest rates, costly fuel and climbing steel costs

Develop supply
base with
emphasis on
lower costs
Centre willing to provide assistance for alternative fuel options

— PHOTO: R. V. MOORTHY

UNPRECEDENTED CHALLENGES: Santosh Mohan Dev, Union Minister of Heavy Industries, flanked by Ravi Kant (right), Managing Director, Tata Motors, and Pawan Goenka, President, Automotives Sector, Mahindra and Mahindra, releasing a brochure at the SIAM convention in New Delhi on Thursday.

NEW DELHI: The Indian automobile industry on Thursday urged the Centre to take corrective measures to check sluggish growth of the industry which is reeling under the pressure of high interest rates, growing input costs and spiralling fuel prices.

Speaking at the annual convention of the Society of Indian Automobiles Manufacturers (SIAM), inaugurated by Union Heavy Industries and Public Enterprises Minister Santosh Mohan Dev, its President Ravi Kant said: “India’s automobile industry today is facing unprecedented challenges.”

“The sector is reeling from a triple whammy of interest rates at seven-year high, costly fuel and climbing steel and other raw material costs. The auto industry, which grew at 15 to 27 per cent in the past five years, is facing numerous challenges now due to shrinking of demand,” said Mr. Kant, who is also Managing Director of Tata Motors.

“I would like to ask the government to take a note of the deteriorating health of the industry and take corrective measures so that objectives of the Automotive Mission plan can be achieved,” he added.

In his address, Mr. Dev said: “In order to meet future challenges, automotive companies will need to look at ways and means of not only ensuring that the best available talent is chosen to lead them, but also to identify the leaders of tomorrow.

Praising Tata Group Chairman Ratan Tata for his Nano project, the Minister said: “We are at the threshold of many Nano-like achievements provided we have the right kind of leadership. It has not only demonstrated the Indian capability to innovate but also India’s strength in frugal engineering.”

Referring to rising oil prices, Mr. Dev said the government was willing to provide assistance for alternative fuel options such as the hybrid.

“Hybrid is one other area where the government is ready to provide all help to stabilise and commercialise the technology in India. It will not only address the problems arising out of high cost of hydrocarbons but also the issue of greenhouse gas emissions,” Mr. Dev added.

Speaking at the convention, Union Commerce and Industry Minister Kaml Nath said auto exports from India would reach $25billion in the next decade and the government would play its part by providing the enabling policy framework.

“By the middle of the next decade, India should be the destination of choice for design and manufacture of automotive components and vehicles in the world.

“The future challenges for the Indian automobile industry would be to develop a supply base with emphasis on lower costs and economies of scale, develop technical and human capabilities, overcome infrastructural bottlenecks, stimulate domestic demand and exploit export and international business opportunities,” Mr. Nath added.

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