16/09/2019
Why Indian Govt. should NOT do favour to Petrol-Diesel Automobile Companies?
- By Vikas Chawda
Burning issues - who will take this burden?
1. India’s biggest import bill is crude oil
2. Recent unrest in Gulf shoots-up the oil prices and will adversely impact Indian economy
3. Automobile petrol and diesel smokes are the main culprits of pollution
4. Delhi and many cities choke due to this severe air pollution
5. Alarming signs of cancer and lung problems are on the rise due to this pollution
Automobile Companies must answer this…
1. Times of India (TOI), Ahmedabad edition 13.09.19, reports the total combined sale of HCV/MCV/LCV, 2 & 3 –Wheelers gone up – 253.2 Lakh (2016-17), 290.8 (17-18), 309.1(18-19) in India.
2. Is it not that your demand and sales assumptions for Indian market were much higher than the ground realities? And you kept on expanding production capacity!
3. In last few months when the sale was declining, you continued adding inventories and piled up stocks without cutting down production. You still spent huge on advertisements and promo. And now crying for help, who is responsible?
4. Last 3 decades, auto companies enjoyed growth, good perks and benefits. Sales decline started only recently, so why this uneasiness? Up & down cycle is seen in any business.
5. Slowdown is felt in many businesses. Because you are big brands and getting media attention, you are making more noise to pressurise government for special favours!
6. Isn’t it reflect “Profit is mine and loss is yours” psyche? Any Govt. favour is ultimately a burden on tax-payers and common man of India. Is it fair?
7. Worldwide Petrol-diesel Auto Industry is facing heat. No wonder this industry is set to be a ‘Sun-set Industry’ due to Green Technology Innovations and Disruptions.
Ground Realities, Statics and Expert Views:
1. Unrest in Gulf and volatility in crude oil prices result into vulnerability of Indian Rupee value, Indian economy, stock prices, petrol-diesel price fluctuations, common man’s budget.
2. In recent interview, Maruti Chairman Mr. R C Bhargava says “Cars are getting expensive and unaffordable for Indian consumers”
3. He points out “you can’t consider Indian car buyer as that of US, Japan, European or even China, as per capita income of India is less than 10% compared to them”.
4. He again says “Top management salary should be max 15-20 times of a worker’s salary, whereas it is actually up to 500 times and even 1000 times in auto sector”.
5. On auto sale decline, he points out “Bigger issue is availability of finance. Banks are strict now due to NPA issues, stricter norms of RBI, Govt. tightened screws on bad debt, frauds.”
6. Owning a car is becoming difficult due to its cost and additional expenses e.g. parking charges, toll tax, ever increasing insurance premiums, hefty RTO fines, car running & maintenance cost, second-hand car market etc. GST is not the only factor.
7. In cities, many times, people don’t use car, because they don’t get parking.
8. Choked & bad roads, reckless driving, so many accidents, traffic jams – its horrible experience to drive cars in India. In such a scenario, many prefer to hire Ola, Uber for a tension free ride. Statistics shows, this trend is on the rise in last 5 years.
9. Proof - Combined Ola & Uber statics till March 2019 – Reach 250+ cities, driver partners with 26 lakh cabs, daily booking approx. 40 lakh, average use approx. 5 times in a month/person, 6 lakh cabs bought in last 5 years, as per latest press coverage by Dainik Bhaskar.
10. Delhi CM announced Odd-Even car formula to be back again. So even if you own a car, you can’t use half of the days in a month!
Holistic Solutions:
1. Go for Electrical Vehicles and Green Transport options
2. High time to get rid-off Petrol-diesel vehicles
3. Better public transport facilities and Metros
4. Implement ‘Work from Home’ option, that will reduce traffic burden
5. Encourage Innovation, Digitalization that avoid commute / travel
Your views, feedback, comments are welcome…
Thanks.
Vikas Chawda
www.quantum-leap.net.in
