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Words don’t help sales, need action from govt, says R. C. Bhargava

Mr. Bhargava said he does not think the car industry will revive either with ICE, CNGs, biofuels or EV, unless there is an answer to the question of affordability.

Hitting out at the government over lack of steps to aid the automobile sector amid declining sales, Maruti Suzuki Chairman R.C. Bhargava on Wednesday said just statements on the importance of the automobile industry will not help with sales, and the government needs to take ‘concrete actions’ to make it happen.

“We have been going through a situation where this industry has been declining over a long period of time and despite various people in the government, we just heard Mr. Amitabh Kant saying how he believes that the economy would only move forward, manufacturing could only move forward with automobile sector,” Mr. Bhargava said speaking at the 3rd Auto Retail Conclave, which was attended by Revenue Secretary Tarun Garg.

He added that there have been a lot of statements made about the importance of the automobile industry, but in terms of concrete actions which would reverse the declining trend, he has not seen any action on the ground.

“I’m afraid words don’t get us very much in the terms or extra sales, but you need concrete action to make this happen,” he said, adding that this makes him wonder whether old beliefs that passenger cars are luxury products to be owned only by the rich has really changed in this country.

He pointed out that everybody should have been worried about what was happening to the growth of the automobile industry long ago, and not just the car industry, but also the two-wheeler segment, three-wheelers segment and the commercial vehicle segment.

“But I’m sorry to say that there has been very little in the form of any steps taken which would reverse this trend and that is what worries me,” he said. Mr. Bhargava further added that the growth in the car industry in India to become number four in the world is largely because the people in the country have a great aspiration to own cars, and not because there was any deliberate policy.

This, he said, supports his view that the change in the mindset of planners about the importance of the automobile industry remains confined to words and does not translate into action.

Mr. Bhargava highlighted that while making decisions such as moving to electric vehicles, planners tend to forget about customers and whether or not they will be able to afford the cars. He noted that while he supports that Indian customers should get modern, safer and cleaner vehicles, there is a need to see how these vehicles are made affordable for those at lower income levels.

“Mr. Kant rightly emphasized the importance of moving to electric vehicles. But along with the decision to move electric vehicles, again the whole question of affordability of these four wheelers comes into question… because if the auto industry is to drive the economy and the manufacturing sector, if the penetration of cars in India has to move from its 25-30 cars per thousand people …it requires millions of cars to be made every year and there have to be millions of people in India who will buy a car every year. Are we sure that we have enough customers in India who have the means to buy these millions of cars every year? Is income growing up that fast? Are jobs growing that fast?” he questioned.

“We have always forgotten customers in the centralized planning system because the customer didn’t matter. And again, like the importance of cars, I think that factor has remained unchanged and we still don’t think of the customers when we plan. Will the customers be able to afford those cars,” he stressed.

Mr. Bhargava said he does not think the car industry will revive either with ICE, CNGs, biofuels or EV, unless there is an answer to the question of affordability.

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