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Last Updated : Jul 11, 2019 10:55 PM IST | Source: CNBC-TV18

2020 will have a significant increase in the prices of the vehicles: M&M’s Pawan Goenka

Commenting on the SIAM data Goenka said, "It is hard to predict what will happen in the next two to three months. However, we certainly hope this will not last very long."

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Pawan Goenka, Managing Director of Mahindra & Mahindra (M&M), spoke to CNBC-TV18 about the company's quarterly performance and the recently released Society of Indian Automobile Manufacturers (SIAM) data.

"Last year’s first quarter was one of the best quarters we had in a long time. Therefore, some of the negative growth we see is an effect of a high base of last year quarter," Goenka said on July 11.

"The safety norms that are coming in on October 1, 2019, and the BS-VI norms coming from April 1, 2020, will have a significant increase in the prices of the vehicles and put downward pressure on demand," he added.

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Talking about tractor sales Goenka said, "We had said 5 percent at the beginning of the year and have seen degrowth of 15 percent in Q1. In our internal estimate, the Q1 was supposed to be small degrowth, maybe of 5 percent, but not 15 percent."

"We will require 10 percent growth for the next nine months to get 5 percent growth for the whole year. 10 percent appears unlikely. Therefore, we will have to slightly downward revise our estimate," added Goenka.

SIAM data for the month of June indicated a 24 percent year-on-year fall in passenger car sales, while two-wheeler sales were down 12 percent. SIAM said auto sector de-growth, if not addressed, may lead to job losses.

Commenting on the SIAM data Goenka said, "It is hard to predict what will happen in the next two to three months. However, we certainly hope this will not last very long."

"If we do all the right things, India has resilience. The industry has the resilience to recover quickly from the sharp drop that occurred. It has been proved two-three times in history," he said.

"We need some improvement in the market sentiment. Certain things that the automakers do and unfortunately stimuli from the government are needed to come out of this difficult situation that the industry is facing," Goenka added.

 

Source: CNBC-TV18
First Published on Jul 11, 2019 05:02 pm
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