ng16643 : How do you see Auto sector performing in next two years especiaaly when Indian goverment is talking about withdrawing Stimulas package?

Hemant Luthra : ng16643 : Since the growth in demand in India is a function of rising real incomes and aspirations, I believe the Auto Sector will continue to grow in the Two Wheeler and the small car segment at well over 10 & 8% respectively both because of domestic demand as well as because of India becoming an LCC hub for frugally engineered export of high quality, value for money cars, SUVs for the rest of the world

swaminathan : Our Q2 GDP has come in at 7.9% what are your views on this. What would be the main reason for this and do you think this growth will sustain going ahead?

ankbx : sir, what are your views on the future GDP growth? will it maintain the current percent?

Hemant Luthra : Swaminathan and anbx: I believe that the Reserve Bank has moderated its F10 GDP target from 6.5% to 6.1%. Because of the global financial crisis of last September and the skewed rainfall this growth is lower than what one would have hoped but I believe also lower than what we will see in F11 as a result of the strength of the Indian Banking system and the rise in confidence which will have a beneficial impact on capex across all sectors. The concern will be inflation.

rikenmehta_2 : sir where do u see the Indian agri output in next 10 years? How will you relate it with ur tractor segment growth in next 10 years?

Hemant Luthra : Rikenmehta 2: The Indian agricultural growth should come in at 3% and more in the next year perhaps as much as 5% given the low base of F10. Obviously this will have a beneficial impact on the demand for tractors where we are market leaders not just in our share of market but in the technology that we apply for the benefit of the customer and continuously improve upon. The tractor market should also see growth of 6-8% per annum over the next 10 years because the intensity of penetration is still far below what the present rural incomes and wealth can justify.

aks@123 : Which are the top 5 sectors with the highest growth potential for Indian investors in the next 10 years?

Hemant Luthra : I wish I was a soothsayer - I would probably be a rich man if I could predict. My own bet in no particular order is on Auto & Auto Components, Engineering Services, Infrastructure, Products & Services that service the rural market, IT, Telecom & Banking

pappuspeak : Kindly explain the future plans about collaboration with renault and bringing on its new vehicles and versions

Hemant Luthra : I believe my colleague Pawan Goenka as Head of the Automotive business is in the best position to answer this question.

swaminathan : What is the outlook for the auto sector in India. With the ongoing crisis in the US and Europe do you see any opportunity in taking over some companies globally? If so which ones have you identified?

Hemant Luthra : I have already said on this session that I believe the Auto, Auto Component and Engineering Services market is one that will benefit from the crisis in Europe and North America as OEMs look to drive down cost and leverage the skills of companies like Mahindra to design and build product for them at effective prices. There are many opportunities in Europe and North America which are available for acquisition of Technology & Management & Customer access at prices much lower than in the past. However, it is unlikely that we will make any moves since the banks have not yet relaxed on the credit they provide to the extent that gives us the confidence to go forward. On the other hand there are enough companies that are going into bankruptcy whose assets are available at reasonable prices which is an opportunity that we continue to evaluate.

swaminathan : Do you expect the ongoing crisis in Dubai spilling to the India real estat market? What do you think would be the immediate effect of this? Is there a chance of a spillover to other also defaulting?

Hemant Luthra : I have not followed the market this morning but I doubt that there is likely to be any serious long term impact because of what has happened in Dubai on Indian banks and Institutions. Mahindra certainly has no exposure. The effect may be confined to the remittances that were sent home by experts Indians but since only a small portion of those remittances come from Dubai and there is a flood of liquidity because of cheap credit in the US I suspect that this crisis will blow over. I do not expect other Emirate States to default and do expect Abu Dhabi to provide some conditional support

MCHIN : How are the prospects for electric cars and other technologies over next 5 years? Do you see a gradual shift away from petrol & diesel engines?

Hemant Luthra : Different OEMs in Japan and Europe and North America have made different bets on Technology. Renault is looking at the Electric car as is GM. Chrysler`s new products will come largely from Fiat who specializes in small cars with efficient Turbo Charged Diesel engines. Toyota is looking at Hybrid. I believe some of these menologies will take more than 5-10 years to pan out. Therefore, the petrol and diesel engine are here to stay but given emission norms will probably be most popular in the range under two liters with Turbo Charged Engines..

swaminathan : Commodity prices have spiralled? Where do you see inflation in the next 6 months. Also when do you think RBI will start tightening and increase interest rates. How much higher do you see interest rates 6 months and 1 year from now?

Hemant Luthra : I believe that part of the reason for the increase in commodity prices is the demand in China and India, part of the reason is the recovery in North America and part the decline of the dollar. I see some stability returning when interest rates in North America are raised some time in late F11 and the carry trade becomes unremunerative and the dollar stabilizes.

MCHIN : Do you believe that small cars will be popular globally and that global demand will grow strongly?

Hemant Luthra : Yes I do and it is evident that even in an economy like Germany the true beneficiary of the cash for clunckers scheme were the likes of VW which produce small cars, the Audi A4 etc. I do not believe that this is a trend that will reverse post the crisis.

ramasubramaniam : How has been the response to the new 2 wheeler Rodeo and also the new mini truck that you have launched recently

Hemant Luthra : I believe both are doing well. The former has the advantage of carrying the Mahindra Brand that represents reliability and ruggedness and great value for money. It also benefits from the fact that a subsidiary of Mahindra Engineering Services based in Italy (Engines Engineering) and a well known specialist in two wheelers has been closely associated with the product. The initial reaction is encouraging and we are on target with the expected volumes. The mini truck is doing well too even though we are coming from behind.

Hemant Luthra : Ladies & Gentlemen, Thank you very much for taking an interest in Mahindra and my views on what the future holds. Should there have been unanswered questions left out because of the paucity of time please do feel free to get in touch with me through our Corporate Communications and / or Investor Relations Cell C/o: balwani.roma@mahindra.com or sharma.sandhya@mahindra.com respectively. Thank you and have a good day.