Q: How that impacts an industry like yours in specific with rates, input cost remaining high? What is the kind of leverage or elbowroom is there right now for price increases?

A: From transport operator’s point of view, it is the availability of finances that has become an issue. This is not to do with the fact that there is lack of liquidity, it is just that some of the big players have chosen not to go into this market because they fear a potential Non Performing Asset (NPA) situation or simply because their book is a bit unbalanced. There are other players such as the nationalized banks who have headroom for stepping in and building a book on vehicles, automobiles finance in general and commercial vehicles in particular and they will do so. And if that happens, then there is not much of an issue in terms of an interest rates. That’s a very peculiar and a very unique situation concerning the truck operators. The interest rates going up could get into a tipping point specifically at this point of time. Given the current interest rates for commercial vehicles and the automobiles industry in general, interest rate is not yet a tipping point. It is not a major concern, the availability and the allocation of funds by the big financers is an issue now.

If we see further potential for input cost going up, you would have no choice but to increase prices. Pushing the prices beyond a point would have further dampening effect in terms of demand. But, there is some little headroom available for price push without affecting the demand.

Q: Going by past instances of the last decade or so, how would you rate the ability of people in the industry to see an impending slowdown coming or it’s already on them?

A: We are notoriously bad in forecasting. My only consolation is that the economies, the industry, the market, the stock market, have all been unprepared for an impending slowdown. The fact that we are staring at the face of some of these underlying commodity issues for long - still we chose to ignore them, is a clear case that we are not seeing enough of the future.

Q: There is also another body of thought that seems to indicate that the key concern right now may not be between deficits, it may not be in inflation. It’s the kind of monetary policy and for some it’s actually being seen as a slightly loose monetary policy, what would you say to that?

A: If you just look at the overall NPA (Non-Performing Assets) situation for the banking system, it’s still pretty much under control. The anatomy of this inflation is not necessarily monetarily driven. The total money availability is certainly a factor but the excess money liquidity is not the push.

Q: What about fuel prices - what did you make of the token hike that was announced, and what kind of implications do you see it having on industry per say and yours in specific?

A:  Some of the operators feel that this is a level that they can absorb. There is concern in terms of this going up. But at the moment it’s getting absorbed. There would be some vocal protest from the community at large. But it’s not again pushing them to a dipping point. From our point of view, energy needs to be priced correctly in order to bring conservation. The headroom for cutting down energy consumption in every industry including ours is quite high and when you get pushed into this, there is no doubt that you begin to innovate. You begin to look at new ways not merely in terms of energy consumption in the factory but how to get better fuel efficiency in the vehicle. So, it’s a good thing to happen.