Real growth to come when two-wheeler demand picks up: SIAM

Sounding cautious, Vikram Kirloskar, president of SIAM — the apex organisation representing vehicle and vehicle engine manufacturers in the country— said sales in the industry have been down and it is hard to tell if the sector is out of the woods. Speaking on the sidelines of the 55th annual Society of Indian Automobile Manufacturers (SIAM) convention, Kirloskar said real growth will come when demand for two wheelers grow. While sounding hopeful of a pick-up in demand, he said better-than-expected monsoon and government's rural impetus should aid demand.Below is the transcript of Vikram Kirloskar's interview with Ronojoy Banerjee on CNBC-TV18. Q: Have you given some sort of a roadmap or forecast of what will be the sort of growth projections? A: My concern was not so much for growth. The growth will come, India is growing, we have a huge amount of headroom. My concern was more qualitative in terms of what kind of vehicles we will make, what kind of technologies that will come, where will the capacity increases go on and stuff like that. Q: Give me a sense, last time when the SIAM conference happened, the industry was in doldrums and no one knew when the turnaround is going to happen. Compare to that, we are seeing moderate growth because interestingly the commercial vehicles (CV) overall so far this financial year is seeing some amount of growth so would you say that the worst is over? A: We are starting from a very low base. So just to say the worst is over or is it a pent-up demand, it is hard to tell but I think it is more than a pent-up demand because you are seeing it consistently every month. I think when we see the two-wheelers start growing, it will be the real growth by that time and the two-wheelers will grow for sure. Q: The two-wheeler overall sales have been almost in the negative now especially the motorcycle surprisingly so now with even the monsoon seems to be below average, do you think that is a big concern area as far as the automobile is concerned? A: Monsoon was better than the original expectations and in some states like Karnataka, northern Karnataka has been quite bad. We are facing a terrific water shortage as well as power shortage but I think the change in government resulted in a change of how rural entities and incentives were delivered. That has also made a change in the demand pattern of two-wheelers and as that stabilises, you will start seeing the improvement in two-wheelers as well.