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Last Updated : Sep 13, 2019 03:33 PM IST | Source: Moneycontrol.com

Auto slowdown structural, duty cut won't spur demand: India Cements' N Srinivasan

"What if sales do not pick up after duty cuts?" he quipped, stating that bad planning and strategy that has led to this situation

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It's been a downward slope for the automobile sector in India and most manufacturers have been asking for a cut in the Goods & Services (GST) rate to 18 percent from 28 percent.

Rajiv Bajaj, MD of Bajaj Auto, said there was no need for a cut and more recently, on September 12, N Srinivasan, MD of India Cements, commented that the current crisis was a result of poor planning by automakers.

Speaking to Times of India, Srinivasan said, "A duty cut will not spur demand. The issue is more structural. Look at us (cement trade). We have been eking out a living in south India by running our plants every two days for nearly four years now. Cement is taxed at 28 percent. We have learned to live with this and work around these levies. We never asked for cuts. On the contrary, automakers are asking for cuts with just a few months of slump and after decades of growth."

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Also Read: Why cars like Hyundai Venue, Kia Seltos and MG Hector are beating the slowdown

"What if sales do not pick up after duty cuts?" he quipped, stating that bad planning and strategy that has led to this situation.

Srinivasan feels the government needs to factor in the balance sheets and cash balances of automakers before taking any such step, flagging Maruti Suzuki India profits of over Rs 1,400 crore and huge cash pile.

To get through the slowdown, he suggest automakers introduce cheaper products to keep the market interested rather than 'crying like babies' and asking for tax cuts. "The slump was seen coming, yet automakers continued to pile up inventory."

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First Published on Sep 13, 2019 03:29 pm
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