Turnaround in growth visible; optimistic on overseas biz: M&M

Anand Mahindra, Chairman of Mahindra & Mahindra (M&M) speaking from the sideline of Delhi Auto Expo 2016, says that while the industry is not very optimistic on auto sales picture, M&M is seeing an uptick in growth currently.Speaking to CNBC-TV18’s Ronojoy Banerjee, Mahindra says that he had been hoping for robust turnaround in sales in the first quarter of 2016. The company reported a 9.66 percent increase in total sales at 43,789 vehicles in January. Mahindra says that the government initiatives like investment in infrastructure are a step in the right direction, but the trickle down of policies is yet to be seen on the growth. Discussing the controversy of diesel-polluting vehicles, Mahindra says the company has recognized risks of diesel-only vehicles and hence ventured into petrol vehicles. Auto companies need to increase investment in new technologies, he adds.M&M will launch e20 in Europe, he says adding that the company is optimistic about overseas projects. Below is the verbatim transcript of Anand Mahindra’s interview with Ronojoy Banerjee on CNBC-TV18.Q: What is the current sentiment within auto industry?A: Feels like we have been waiting forever. And the anticipation of a turnaround of an uptick in the economy is the only way I can describe the kind of sensibility of the auto industry over the last couple of years. I was very hopeful that we would see a robust turnaround in the first quarter of this calendar year. I am not that optimistic as I was in the next few months. M&M has seen an uptick in its sales in January as you know. Largely due o new products, but I would like to see a larger, a higher threshold of automotive sales. If you look, general industry sales have been somewhat slack. I am very hopeful still because the government is doing all the right things. It understands that it needs to invest in infrastructure, it needs to provide a trigger for the economy. But, on the ground, I think there still has to be a trickledown effect of those policies. We have not seen them yet. Q: As a company of course, because of the whole diesel controversy, what is the way forward and I started this interaction, the uncertainty of course, is about what happens post March 31, nobody knows. So, in that sense, as a company, how difficult has it become for you to – we know the auto industry, there is a gestation period, you need to plan for the long run.A: That is why it is not as we pulled a rabbit out of our hats and suddenly came up with the two litre engine in a space of a month. Nor, did we pull a rabbit out of a hat and come up with a gasoline power train. I am very proud of our people in the sense that they recognised that they need to have alternate power trains. And that fact should ultimately prevail as to what is right. Is diesel in general, the villain or is it old diesel? Is there a job to do to take old vehicles and trucks off the road? Are there other culprits to the Delhi air? This will be sorted out not by the auto industry, but by very rational surveys and studies which will continue to come in.In the meantime, we have to be ready as a company and we started planning this many years ago. The gasoline and power train was not planned post the diesel ban, it came out many years ago. The investment in electric was not something that was a knee-jerk reaction. So, as far as I am concerned, every company has to be future ready.