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Sonalika Group's Executive director Joined ET Auto Panel Discussion along with other auto industry leaders and experts.

Sonalika Group's Executive director Joined ET Auto  Panel Discussion along with other auto industry leaders and experts.
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Various automobile industry leaders on Wednesday expressed confidence in the growth of the overall sector in the ongoing fiscal, fuelled by upward trending GDP, higher disposable income and revival in rural demand, among others.

In a panel discussion at the ET Auto CEo outlook conducted today, experts including Charles Frump, MD Volvo Car India, Pankaj Dubey, MD Indian Motorcycle and Raman Mittal, Executive Director Sonalika Tractors discussed the growth opportunities and challenges lying ahead in the fiscal year 2019. 
Frump said the last year has been very encouraging and the same momentum is expected to continue during the ongoing fiscal considering there is no major policy change that has happened so far.

"There is a rising demand for the luxury cars and that will also help drive the overall sales" he added.

Echoing similar sentiments,Rakesh Batra, National Leader Automotive Practices, EY said if you look at the overall economy there are positive sentiments, the GDP growth in the last few quarters is trending upwards, the rural regions is growing with the tractor industry in the fifth gear is prospering.

He further said its the election year so more cash is to be handed out and more sops are to be offered which will add to the overall good growth in all segments.

A revival of the economy post-demonetization and implementation of GST is putting the country back on track. Experts are of the opinion that GDP and the economic reform programmes of the government are indicating positive signs of recovery. 

Pankaj Dubey, during the interaction said the sentiments are positive going forward and is growing quarter on quarter. Last year the base had fluctuated and more sales in March because of pre-buying that happened during the transition from BS III to BSIV emission norms. On an average the sentiments are growing.

Talking about the company, he said from 100 units a year 10 years back to 10,000 units a year today shows the growth path the industry is going through.

"The biggest factor that will drive demand will the stability on the policy front and the duty change which will help grow the industry on a continuous basis," he added.

Ashok Taneja, MD & CEO, Shriram Piston & Rings said, "Till last year auto component industry was cautiously optimistic, this year its optimistic, we were in third gear, now we are in the 4th."

With regards to the auto component industry he said the growth is also reflected in the investments the auto components industry is making.

"I do not remember in the last 10 years when every segment of the auto industry did well and today all of them are doing well and this naturally is good for component manufacturers," he said.

He further said the export markets are looking interesting as the nuts and bolts kept by the government in the past few years now seem to be in place and now we see a momentum flowing.

"The transition from BS III to BSIV has been very easy, nobody is sweating, everybody is more or less smoothly ready for the roll out of BS VI in 2020 and investments are happening behind this," he added.

Speaking on the similar lines, Raman Mittal said the rural growth story comes from the innovation we do as an organisation and that is reflected in the sales numbers.

"We have more than 6.5 lakh villages and the tractor sold are 7 lakh. Five years back industry was at 4 lakh and our market share has grown from 8 per cent to 12 per cent, which clearly speaks of the rural growth," he said adding that moving forward we are clear this industry will cross 12 lakh tractors and this year the target is 8 lakh units.

According to him, the tractor industry will grow further with good monsoon and availability of finance.

Vinkesh Gulati, Partner, United Automobiles said there is no doubt about the fact that each segment of the industry will grow in double digits.

Sohinder Singh Gill, CEO, Hero Electric India also expressed confidence in the industry's growth saying the emphasis on moving to electro mobility is also expected to add to the overall numbers.

Talking about the commercial vehicle scenario, the panelists said the growth in the segment would be impacted due to the new axle norms after which the official maximum load carrying capacity of heavy vehicles, including trucks, by 20-25% besides scrapping the mandatory annual renewal of fitness certificates for freight carriers.

They said in the short terms the new rule will create additional load capacity and hit demand. 

Batra said earlier trucks were anyway moving with overloaded goods and the new norm has kind of legalised that overloading.

Other panelists also were of the same opinion saying that the move would also hurt demand for new vehicles.

The experts, however, raised concerns on high taxation on hybrid vehicles saying they practically work as electric vehicles and do not even require the kind of infrastructure that is needed for electric vehicles.

"It makes eminent sense that taxes should be less in hybrid vehicles as they are practically working as electric vehicle. It would be a good way to move from internal combustion engines to electric vehicles," Taneja said.

Gill, who is also the Director General, Society of Manufacturers of Electric Vehicles (SMEV) said, "Personal pure EVs are little far away so it becomes obvious that the hybrids are in. Personal cars will come when there is the infrastructure but in between there is a place for hybrids which should be promoted through lower taxes."

Agreeing to the panelist, Frump said Hybrids don't even require the same kind of infrastructure as electric vehicles do so there should be no reason as to why they are kept at the highest tax bracket.

"No one buys an EV today because there is no infrastructure, no one builds the infrastructure because there is no EV so I think we need a bridge to pass that by building a demand side for hybrids first," he added.

Rakesh Batra said By adopting hybrid and allowing them to grow during this transition period, the ecosystem will have the time to get ready for the transition to electric vehicles. 

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