Tarun Garg is an old automotive hand in the Indian market, having been in the industry for almost three decades. The Director - Sales, Service and Marketing for Hyundai Motor India Limited believes that India will emerge from the extended period of economic activity with a certain degree of demand, if some measures are taken by the government.
Speaking to The Pioneer, Garg correctly pointed out that it was not just the automotive sector in India that is hurting and as such, few industries could ask for preferential treatment.
“We are working with the government through our industry body SIAM (Society of Indian Automobile Manufacturers) and making our representations on various issues.”
Garg said that there were three key focus areas for the automotive industry as regards supply-side interventions that the government could do.
“First and foremost is finance. Critically to dealers, so that they can manage their inventories and their costs. The government is considering relief for the Medium and Small enterprises and most dealers fall in that category. It is also critical that consumer finance continues strong, since 80 percent of car sales continue to be financed.”
Specifically to the auto industry, Garg said that he was positive that the government would consider a measured scrappage schemes that would spur demand, “we believe that the drafting of such a scheme is underway.”
“Taxation is the third major aspect where the government can spur demand. How the government gives tax relief is up to them, whether it is a cut on excise duties to reduce prices or relief on personal taxes that leave more money in the consumers hand to spend. These could be time-bound which can encourage spending”, Garg added.
As for Hyundai, Garg said that the second-generation Creta which the Korean carmaker had launched days before the lockdown had garnered 20,000 bookings.
“Our dealers have been reaching out to all our customers who made bookings and unfortunately could not take delivery, all of them are looking forward to drive home their new cars.
The story is the same with all our new models.”
The carmaker has been holding special online classes with their sales and service staff of how they have to reach out to customers as a part of their social responsibility. Service representatives from Hyundai have been calling up customers to give them vehicle maintenance tips.
At the same time, dealers are preparing for the start-up by properly sanitising their locations and also on the service front by ensuring that cars returned to customers after service are highly santised, “everything from the exteriors to the steering wheel have to meet high standards of cleanliness.”
But what about the Indian market? With economic growth for being forecast in the two per cent range, Garg admits that there will be pain in the automotive sector also, yet he is optimistic about the Indian automotive space.
“In 2008 when the Lehmann Brothers collapse happened, India also endured a crisis and car sales were hit. But the two years following that we saw double-digit growth, so when I say India is resilient, that is because India has been resilient in the past as well. The fact is that car penetration in India remains at a very low 27 cars per 1,000. We will see some behavioural changes in the aftermath of this crisis, people will move away from shared mobility to personal vehicles due to hygiene. But there will be other changes as well, and we have to look at the positives that will emerge for us as a society from this, in the new normal.”
