Fourteen months of consecutive growth in car volumes and a strong uptick in commercial vehicles may have brought some cheer to automakers, but companies maintain recovery will remain fragile, unless the Budget offers some serious support..
Carmakers, commercial vehicle manufacturers or two-wheeler giants, FY16 has not been particularly kind to any of them. Though there have been pockets of good fortune, overall growth has emerged uneven and anaemic.
While the passenger car segment has seen a cumulative growth of nine percent, commercial vehicle volumes have grown 8.5 percent in the April-December period. However, the motorcycle segment has taken quite a serious knock, with growth falling 2.5 percent.
New launches are their weapon of choice — whether it's the Bajaj V, Honda's 110-cc Navi, or Hero's Splendor i-smart. But manufacturers say any real turnaround will hinge on what Budget 2016 has to offer.
Pawan Munjal, chairman, Hero Motocorp, says: "There is a slowdown in the motorcycle market and hoping government announces something for rural sector to help stem the decline…"
Granted, the government has been making all the right noises, but the fact that none of this has translated to growth on the ground is a tad worrisome.
Anand Mahindra, chairman, Mahindra Group, says: "Don't know how to read the economy, government doing right things but effects not tricking down."
Passenger car volumes may have grown for 14 months in a row, but that has been entirely due to two companies — Maruti Suzuki and Hyundai — which together account for over 75 percent of the market. And even these companies say the Budget could make or break that trend.
Rakesh Srivastava, senior VP - sales and marketing, Hyundai Motor India, says: "The Budget is a very important moment for the industry. We are hoping there are measures to boost infrastructure."
Speaking of infrastructure, the infrastructure outlay in Budget 2016 is a big concern for companies making medium and heavy commercial vehicles, especially if they are to repeat the 30 percent volume growth clocked in 2015, or push 2016 sales to a five-year high above 240,000 units.
Ravi Pisharody, ED — commercial vehicles, Tata Motors, says: "The infrastructure outlay should remain high like last year. India needs to catch up with other countries and that would give a boost to mining."
The stakes are clearly high and if the government wants to increase private investments as it has been promising, companies say an industry-friendly Budget is the way to go, especially if the 'Make-in-India' dream is to be kept alive.
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