Elected as the president of the Society of Indian Automobile Manufacturers Association (SIAM) during its 52nd annual convention held in Delhi last month, Vikram Kirloskar, the vice chairman at automobile manufacturer Toyota Kirloskar, speaks about what lies ahead for the Indian automotive industry in this exclusive interview
What are the priority issues on your agenda as the president of SIAM?
The philosophy of SIAM is based on two principal factors - promoting healthy competition and ethical co-operation. To that extent, this has to ultimately benefit the customers. We are also going to make a special effort in making people understand the importance of the automotive industry in relation to the economic growth of the country. That is because the automotive manufacturers not only contribute by way of generating a huge amount of employment but also help take the country forward through the use of new technologies and technology sharing with other countries. This also applies to other related sectors like production design, etc.
How will SIAM contribute in building a brand for the Indian auto industry?
The Indian automotive industry is already a brand but I agree that a lot more needs to be done in view of the fresh challenges that lie ahead of us. So far SIAM has done an excellent job in being a technical contributor to help the government formulate new policies, especially with regards to emission norms and development of electric and hybrid vehicles, and now this has to be carried forward. We would also like to engage in a dialogue with NGOs about pollution norms and other issues.
What is your prediction for the year 2014?
We are optimistic right now because the festive season has started and there is hope that Dassera, Diwali, Christmas and the New Year will see an increase in sales of two-wheelers and cars. Therefore, the first quarter results should be good. One cannot predict about what will happen later because there will be elections and one will have to wait for the policies of the new government. There are a lot of ifs and buts right now and we will have to see how the government in power moves towards implementing infrastructure projects, etc.
What are the current trends among auto buyers?
The sales of two-wheelers have been on the rise and this may continue but when it comes to buying cars, one can notice a trend of caution because potential customers aren't very sure of whether this is the right time to invest money in buying a car or playing it safer by investing in something that will yield returns.
Will SIAM also focus on the issues facing component manufacturers?
We are not directly involved with the automotive component manufacturers but there is always an indirect concern because we partner with the Automotive Component Manufacturers Association (ACMA) on several projects and issues. Having said that, the relationship between the OEMs and the component manufacturers is obvious and therefore it is all about looking at the bigger picture.
How has the mining ban affected the auto industry?
The ban has not just affected the automotive industry but the country at large and the Coalgate scam has certainly not helped any. All this has impacted the exchange rate negatively and there has been a ripple effect on the automotive industry too what with the supply of steel getting adversely impacted and the increasing prices throwing budgets into disarray.
Will SIAM initiate any fresh dialogues with the government?
There has been a lot of back and forth between the government and SIAM on various topics but one of the issues that we are currently in dialogue with the government is about creating a retirement plan for old vehicles. This will help in two ways: it will create a fresh demand for new vehicles and secondly, it will take off the roads vehicles which are contributors to increasing the air pollution levels. This is a model that has been successfully tried out in many countries and we feel that India should adopt it too.
Will SIAM hold any shows to increase interaction between buyers and sellers?
Our biggest event in partnership with CII and ACMA will be the Auto Expo 2014 to be held in February. This year, due to space constraints, the show has been split into two parts. The Motor Show which will have on display the cars will be held at Greater Noida from February 7 to 11 while the Component Show will be held at Pragati Maidan in Delhi from February 6 to 9. We hope that these shows will initiate greater interaction between the OEMs, suppliers, vendors, customers and visitors to, as I said earlier, help everyone understand how important the automotive industry is to the economy of the country. Hopefully, the event will also generate more sales in the months to come.
Are there any emission-related norms that SIAM will focus on?
There is one particular issue that we are focusing on. In India, it is mandatory for some of the cities to have vehicles adhering to the BS4 emission standard while the rest are allowed to have vehicles plying with BS3 standards. This creates an uneven platform when it comes to emissions and the negative impact resulting therefrom.
As such, we have been advocating to the government to have a uniform standard across all the cities. Further, emission is directly related to the quality of fuel and therefore there needs to be a policy for supply of the same standard of fuel throughout the country.
What are the major threats to India becoming one of the largest global auto hubs?
There are no threats as such. India can already be considered a global hub when it comes to the production of small cars. Also, across the board the last 10 to 15 years has seen the automotive manufacturers as also component producers making huge investments in technology and manufacturing processes so that we are now as capable as any country of making all kinds of vehicles. A lot of effort and investment has also gone into the training of manpower to work in the automotive industry and the results are there for all to see.
The creation of clusters for component manufacturers has also helped tremendously. The export of cars and two-wheelers from India has also been on the rise and this will surely give the Indian automotive industry the right momentum towards attaining global supremacy. Therefore, in the long term, there is nothing to stop India from becoming one of the important automotive global hubs.