FTA is not the right way to go: Honda Cars VP

Says the FTA could pave way for some of the automobile makers to dump their vehicles in the country

Free trade agreement (FTA) between India and European Union could lead to some of the European automobile makers dumping their vehicles in the country, according Honda Cars India Limited (HCIL) vice president - marketing & sales, Jnaneswar Sen.

“FTA is not the right way to go,” Sen said replying to questions at the launch of the petrol and diesel versions of Honda Amaze, HCIL’s new sedan, here on Friday.

The questions were raised in the light of the reported comments of the Union commerce and industry minister, Anand Sharma, that  negotiations regarding inking of India-EU FTA “are progressing very well”.

Sen said the automobile market in Europe was witnessing a “de-growth”  and the FTA could pave the way for some of the automobile makers to dump their vehicles in the country.

Given that the Indian government had encouraged the automobile manufacturing sector, which provided jobs to a large number of people, he said “what the government was doing today is contradictory” to its earlier stance.

Nevertheless, Sen expects things would improve for the automobile makers in the country this year when compared with last year as petrol costs were coming down and inflation declining.  With the fall in inflation, interest rates were expected to decline. Good monsoons  would also augur well for the industry.

With the launch of Amaze, he said HCIL’s 120,000 units per annum capacity manufacturing facilities in Uttar Pradesh and Rajasthan would be fully utilised.

The company has also embarked on a Rs 2,500-crore expansion plan following which its manufacturing capacity would double to 240,000 units a year. The expansion would be completed by 2014.