All major economies are experiencing a slowdown, says chairman of TVS Motor

We are hoping that by January-March quarter, we should see a revival in demand, says TVS Motor Chairman Venu Srinivasan

TVS Motor Chairman Venu Srinivasan believes that the auto sector, currently in the grip of a slowdown, will revive by January. In an interview with Business Standard, Srinivasan said that the government was taking measures to address the situation. Edited excerpts:

How optimistic are you on the auto industry turning around with government measures?

We must look at what is happening in India in a global context. Every market in the world is slowing down. China, with the trade war still on, is going through recession. Although they are not talking about it, their manufacturing is down. The US is in the cusp of a recession, while Germany and France are showing zero growth. In a situation like this, we are at least growing. However, as growth slows, the demand for manufactured products falls and that is what we are seeing. The government is aware and concerned about this problem. They are doing a lot of consultation with the industry and I think we have seen a couple of announcements to improve the availability of money - putting money in banks, consolidation of banks, and some other measures. One more announcement is expected and I hope it will cover real estate and GST's application to real estate.

We need to undertake measures to pump money into infrastructure to bring growth back. We can't just wait for demand to come back on its own. I think some measures are required to prime the economy. If the economy is not primed, it wont pick up. However, I am sure the government will do it. There is huge scope for recycling water in 10 major cities and that will boost cement and construction sectors, and create jobs. The government should be looking at schemes like prime minister's flagship campaign Swacchh Bharat. All the major economies of the world are experiencing slowdowns. You cannot isolate yourself from this reality in a connected world.

What do you think could revive the rural market demand?

Rural housing and rural roads can provide a big fillip to rural employment.

Can new launches bring in the expected excitement to the customers in the auto sector?

New launches can always bring in excitement, but the basic demand has to sustain. We are hoping that by January-March quarter, we should see a revival in demand. The government is priming the system, putting money in banks. However, it takes time, because we have been witnessing low growth, or negative growth, for quite some time now. If you release water in a dam, it takes time to reach the tail end. However, we are confident that it will happen.

Why job cuts, when employee cost is the smallest element of a company's expenditure?

These is a temporary phenomenon and it happens when the economy goes through such cycles. I don't think there is a reason to panic. I think we are all responsible employers and we don't start with job cuts. We look at engineering costs, materiel costs, power costs and distribution costs before looking at wages.

What is your outlook on the revival of the industry?

January is the time when we expect the industry to revive. You have to give three to four months for the efforts to really start showing results.