Scams, corruption impacting consumer sentiments: Maruti

Maruti Suzuki India Chairman RC Bhargava today said the spate of scams and corruption scandals that have rocked the country has affected consumer sentiments thus bringing uncertainty, especially to the auto industry.

"...all these scam and corruption, all these have a negative impact on people's sentiments. There is a huge amount of publicity we give everyday to all so called scams," Bhargava told reporters here.

He was responding to a query on whether the slowdown witnessed by the auto industry this fiscal would be worse than the one seen in 2008-09.

Bhargava said while in 2008-09 there were implications of the meltdown in financial markets, in this fiscal there were no such issue but high interest rates and negative sentiments due to scams and corruption were having unwanted impact.

The UPA government has been facing heat over corruption charges in organising Commonwealth Games last year and also in the allocation of 2G spectrum licenses, apart from the black money issue.

In July this year, domestic passenger car sales have fallen for the first time after 30 months of continuous growth, registering a 15.76% decline.

In the financial year 2008-09, the domestic passenger car sales grew by just 1.31% to 12,19,473 units due to the impact on auto industry from the global financial meltdown.

He said lack of a proper auto fuel policy, specially regarding the pricing of diesel, has prevented auto companies from investing on engine plants.

"We have a big problem in terms of absence of fuel policy...while the demand for diesel has increased in the recent past due to the increased petrol price, I am not sure how long will this stay like that," he said.

In the absence of a clear road-map on how the diesel prices would be placed in future, Bhargava said MSI has been unable to decide on whether to invest on increasing diesel engine capacity or that of petrol engine.

"I think the result of this us that most of the auto companies won't invest on new engine capacity," he said.

When asked if the company supports the demand of other auto makers to decontrol the diesel prices, Bhargava said: "I am not saying about decontrol of diesel, but only a long-term stable fuel policy. The difference between the two fuels should be fixed".