Automobile industry can recover fast: Arun Malhotra

Interview with managing director of Nissan India

Arun Malhotra, managing director, Nissan India, speaks to Ajay Modi on the challenges facing the industry after demonetisation. Edited excerpts:

Nissan’s sales grew 52 per cent in November, a challenging month for the industry...

The growth looks large due to our low base last year, but we would have liked to report higher numbers. November was a challenging month and we did not want to push stocks into dealerships unnecessarily. One can always push more stocks, but it boomerangs. I hope the situation will improve. Banks will have to play a more proactive role in financing.

What are dealers saying?

They have been telling us that inquiries are there but conversions are taking a lot of time. Attention is diverted. It is very difficult to say how things will move. Once cash circulation improves, things will bounce back. There is potential to recover dramatically.

What impact will demonetisation have on the industry?

When your attention is diverted, a car purchase becomes low priority. Sales are not lost, they are at best postponed. Someone who has decided to buy a car will buy eventually. I think automobile sales will recover fast. The industry is a barometer for the economy.

Some car makers are talking about a price increase in January...

The yen is appreciating and so is the dollar. We will take a decision later in the month. This has been a normal practice for many years.

The industry has showered discounts to push sales... 

Financing is more effective than discounts. If you have a good credit profile and banks can fund you 100 per cent, it helps in buying cars. Used cars sales are affected more because of the cash component. Used car prices have declined 20 per cent on an average.

The industry was expected to post double-digit growth in 2016-17. Does that seem achievable now?

One good month can put things back on track. Everybody is waiting and watching. It is difficult to project today. A change in sentiment can happen very fast.

What response do you expect for the GT-R, launched last week at Rs 1.99 crore (ex-showroom)? 

The GT-R is not a volume product. It is meant to showcase Nissan technology. The GTR’s position globally is unique. We want to use it as a halo brand. We will launch many cars next year and the GTR will have a positive impact on these.