Goenka bats for a 'different' bailout for CV makers

Pitching for a "different" kind of bailout package for the revival of slowdown-hit commercial vehicle (CV) segment, auto industry leader Pawan Goenka today expressed hope the government will accord priority to the demand.
"Commercial vehicle (segment) requires a different type of stimulus than what is needed for passenger vehicles. I hope some priority will be given to turnaround the segment," Goenka, Mahindra & Mahindra Executive Director and President (Automotive & Farm Equipment), told reporters here.
However, Goenka, who was speaking on the sidelines of an industry event, did not spell out the exact contours of the bailout package for the CV segment, hit by low sales.

The comments come close on the heels of a media report today which said the Commerce Ministry has proposed a "cash for clunkers" scheme under which it wants the Government to give Rs 1 lakh for every 15-year-old CV.
Goenka said commercial vehicle demand depends on the affordability factor unlike the passenger vehicle space where sentiment drives sale.
CV industry has been affected more by the economic downturn than passenger vehicle space and the last couple of years have been very difficult for the former, he said.

With rising diesel prices, the cost of doing business has gone up. Out-of-sync freight rates, too, have added to the cost, Goenka, a powerful voice of auto industry, said.

The Mahindra Group official said 2013 has been a very difficult year for the industry but the worst now seems to be over. "We think we have reached a kind of bottom... And from here we should start to look up."
However, whether the turnaround happens in one quarter or two is yet to be seen. The industry is expected to be in full swing by fiscal 2016, Goenka added.
Stating that auto industry is currently down more due to weak sentiment than other factors, he said some positive triggers are required for a change in scenario.
The trigger could come from the changing economic situation, opening of the projects, by way of some kind of incentives or stimulus package to the industry, he said.

"It could come even from an auto expo which at times gets people interested again in looking at vehicles and beginning to say 'why I should not go and by that vehicle'."
Goenka said the industry will continue to focus on new product launches and go slow on price hikes.