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‘Future of India’s auto industry is vibrant’

‘Future of India’s auto industry is vibrant’

Goutam Dutta, director-marketing (vehicles, equipment & projects) is based in Muscat, Oman and had been employed with Saud Bahwan Group, the largest business conglomerate, for the past 28 years.

He was deeply involved in the growth of the organization and the products marketed by the Group enjoy highest market share in Oman. He had been involved in marketing of light vehicles, heavy duty trucks, construction and mining equipment, special purpose equipment and infrastructural projects.

Saud Bahwan Group believes in total customer satisfaction approach with unwavering commitment to improve customer services and support. Innovative marketing efforts are being continuously made to meet customer requirements.

In a candid discussion with Pankaj Adhikari, Dutta, who retired on December 29, speaks about the growth of Indian automobile Industry, Modi’s “Make in India” policy and his unique experience of working in Oman.

Q. The automobile industry in India accounts for 22 per cent of the manufacturing GDP. How do you perceive its growth potential in India’s domestic market?

A: The Indian automobile industry is slated for a high growth in mid and long term. The present penetration of four-wheelers in India is amongst the least. The passenger car market currently hovers around 2.6 million units and with a very conservative estimate it is expected to reach 5 to 6 million units by 2020. This will make India the third largest market after US and China. However, actual growth definitely depends on improvement in infrastructure.

Goutam Dutta: marketing strategist

Q. According to a report by Standard Chartered Bank, India is likely to overtake Thailand in global auto-export market share by 2020. Your comments….

A: Today India is a much acceptable export hub compared to China. In the last few years, all multinationals automotive brands are setting up their manufacturing plants with three to four times higher capacities considering India as low cost production base to export to the international market. Apart from Nissan, Ford & JLR, luxury brands like Mercedes-Benz & BMW have also set up large R&D centres. The current government’s focus on local production will soon surpass Thailand as an export destination.

Q. Should the Modi government encourage foreign investment in the automobile sector?

A: Automobile sector has been opened up for FDI long back. Daimler BMW etc are all 100% subsidiary of their parent companies with no local partners. Modi’s “Make in India” campaign will surely give further boost to the already growing automobile manufacturing industry.

Q. To match production with demand, many auto makers have started investing heavily in various segments in the industry in the last few months…

A: Current production capacities of most of the leading brands are much higher than current domestic demand with the belief that the Indian automotive industry is slated for a high growth in the mid & long term. Now the luxury brands are stepping up their production capacities to meet the expected overall demand in the coming years.

Q. Among auto makers, Maruti Suzuki, Hyundai Motor India & Honda Cars India emerge the top three gainers… Should there be any level-playing field in the auto sector?

A: These three players have been extremely aggressive and focus on their product offerings and meet consumers’ expectations. They manufacture India-specific fuel-efficient models and penetrate in rural markets with retail network. After the introduction of diesel engine in their line-up towards the end of 2012, Honda is expected to be more active in future. So, there’s no level playing field and it is the manufacturers’ ability in meeting consumers’ requirements which contribute to their growth.

Q. The ever rising demand for scooters prompted Honda to set up its first dedicated scooter plant in Ahmedabad. How do you perceive this Indians’ passion for two-wheelers vis a vis four-wheelers?

A: Motor cycle contributes to 30% of the market and scooter and mopeds the balance 30%. Honda is the pioneer to revive this scooter demand. Small wheelbase vehicle gives specific advantage in driving into small/narrow streets and they are easy to cover short distance and help in avoiding traffic hassles. After the introduction of electric start etc., features have been brought in for easy operation. Hence scooter plays a vital role in helping in growing working and non-working female population thus contributing heavily to the growth of this segment. Honda remains the 2nd largest player after Hero in the domestic 2-wheeler market. Bajaj Auto, the 3rd largest player, has their competitive edge in the export market but they fall short.

Q. The auto sector is one of the biggest job creators. Do you think the policy of the Modi government will boost the industry?

A: Current fuel prices have already brought cost of ownership. Government policy will surely boost the industry and as India grows in stature as a more reliable export hub, production volumes are set to increase leading to higher employment. Auto ancillary industry has to expand also to match up with growing manufacturing pace which will further create job opportunities.

Q. How do you visualize the future of auto industry in India?

A: Future of India’s auto industry is extremely vibrant. Domestic consumers’ taste is also developing in a mature direction. Today “low cost” badge is no longer a selling USP (Nano positioning a big flop). Indian customers are economically strong and are more conscious on safety and convenience features. Hence, overall future for the auto industry is bright.

Q. We these days witness ‘car recall’ due to manufacturing defects… don’t you think it affects the brand image?

A: Though car recall due to manufacturing defects causes a bit of anxiety in the mind of the customers, if a manufacturer organizes the “recall campaign “ at the earliest and attends to the problem then certainly the issue gets resolved and brand image does not get affected. However, such recalls should be a clear reminder to manufacturers to be much more cautious in their design, manufacturing process and vendor selection.

Q. In view of the depleting global oil stocks, what is the future of battery operated car?

A: In the short term, it may appear that a steep dip in oil prices may affect future of battery operated cars. However, efforts by various leading auto manufacturers to produce battery operated car is to primarily address the environmental issues and therefore in mid and long term, substantial growth will be there for battery operated cars. In fact, Toyota, General Motors & Ford are investing heavily in producing such cars.

Q. Do you think there’s a need of an efficient public transport in Gulf countries?

A: Public transport system is a must for any country. In some countries, namely UAE, the issue has been addressed in a very comprehensive manner. In Oman, too, the government is seriously contemplating with the idea of having a structured network of public road transport and also having rail services. Potential for growth in this area is enormous.

Q. Has your company taken any CSR initiative in Oman?

A: Saud Bahwan Group is in the forefront of CSR activities. Our founder chairman Sheikh Saud Bahwan and present chairman Sheikh Mohammed Saud Bahwan are well known philanthropists. As an organization, CSR forms an integral part of our activities.

Q. If you’ve visited any world-class automobile engineering institute, your comments…

A: I have been fortunate to visit the R&D and Design facilities of world renowned manufacturers like “Toyota”, Trucks manufacturers – “MAN & HINO”, Construction Equipment manufacturers “Komatsu”, largest Crane manufacturer in the world “XCMG” etc and indeed such facilities have given me a lot of confidence that all these manufacturers are committed to produce products which are absolutely safe and also they meet the ever increasing requirement of the environmental friendly products.

This article appeared in www.theindiandiaspora.com

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