NEW DELHI: In a strong message to the auto sector, Asia's richest banker Uday Kotak today said Indian auto industry should get ready for structural changes as cars are no more an aspiration as they once were. Giving a personal example, Kotak Bank Chairman said his son depends on cab aggregators like Ola and Uber instead of thinking to buy a car.
Speaking at the Society of Indian Automobile Manufacturers (SIAM) annual convention, Kotak said customer preferences are changing pretty rapidly and car manufacturers should be ready for the onset of shared mobility.
He said problems in the auto sector are structural and cyclical. To overcome these challenges, he said some introspection is needed by the auto industry as the sector requires a lot of internal changes.
"We need to be confident and not arrogant about the current state in the auto sector," he said.
He said the demand in the auto sector can be boosted in two ways though government spending and price rationalisation by the manufacturers.
He also asked the companies to look for export possibilities. "Weaker rupee helps in boosting exports and this is the right time for the auto industry to look at boosting exports," he said.
Sharing similar concerns last month, Bajaj Auto's managing director Rajiv Bajaj had also suggested the industry to look for opportunities beyond India. Bajaj said the industry should focus on fostering falling domestic sales with exports to global markets.
He also said the industry should look at their own shortcomings before asking for any stimulus from the government.
"Industry needs to ask itself if it has done enough to become globally competitive," he said.
He said most of the auto industry slowdown is of their own making. “Lot of companies are not able to export because frankly, by world-class standards, their products are mediocre. Obviously, I don’t want to name them but when you make everything… when you will make scooters, and bikes and cars and jeeps and SUVs and trucks and buses and everything under the Sun, you are obviously not going to be world-class at anything,” he added.
Reeling under slowdown, Maruti Suzuki yesterday decided to shut down the passenger vehicle manufacturing operations of Gurugram plant and Manesar plant in Haryana for two days.
The auto major had reduced its production by 34 per cent in August, making it the seventh straight month of reduction.
In July, the automaker had cut its production by 25.15 percent to 1,33,625 units.
On September 1, the company had reported a 33 per cent dip in total sales in August.
The auto industry employs over 3.5 crore people directly and indirectly and accounting for nearly half of India's manufacturing output.