January 11, 2012

Economic downturn has bottomed out: Dr. Montek Singh Ahluwalia

The current subdued mood in the auto market is transitory.  The Indian automotive market is going to grow in the medium and long runs riding on the, growing economy and rising aspirations & disposable incomes of the middle-income households, rural people, and
favourable demography.  However, the road ahead is not smooth all the way and the auto market is likely to encounter rough terrain from time to time. This was outcome of the deliberations of FADA’s 7th Auto Summit 2012 held on 9th & 10th January 2012 at New Delhi. 

Dr. Montek Singh Ahluwalia, Dy-Chairman, Planning Commission, who was the Chief Guest at the Valedictory Session of the Summit expressed the view that the current downturn in economic growth due to developments in Euro zone, had bottomed out.  Allaying the fears, he said that the economy was on its way back to the high growth trajectory as the inflation was subsiding and the rupee stabilising against the dollar.  The economic growth would climb back to 9 per cent in the next couple of years. This augured well for the automotive market, he added amid thunderous applause from 800-strong audience at the Summit.

Earlier, Anand Mahindra, speaking as the Chief Guest at the Inaugural Session, painted a very rosy picture of the auto market in India, saying that with low levels of motorisation in India and rising incomes of the people concomitant with the growing economy, Indian auto market cannot but has to go up. Sounding bullish on the future of auto market, he said that Indian auto market was at a take-off stage and would soon be in the league of top 5 producers of automobiles in the world. Referring to the moderation in growth at present, he said, “When the market hits the bumpy road, we need not get depressed and be ready to take the challenges head on.” Explaining metaphorically, he said that terrain ahead should not deter us. Instead of applying brakes, the industry and the market have to be geared to steer through the rough patch, eventually making our own road to the growth & prosperity.  He exhorted automobile dealers to follow 4 rules of off-road driving when the going gets tough, viz. (1) ‘Don’t apply brakes and instead swerve through the rough path; (2) Know your terrain and adapt; (3) Keep your car (meaning organisation) in top condition; and (4) Make our own road.

Rajiv Bajaj emphasised that excellence and specialisation should be the motto for all.  Instead of getting into everything under the sun, we should evaluate our own strengths and weaknesses and focus on what we are good at. He said that management is all about alignment. All the problems are the result of misalignment. Exhorting that the attention should be on ‘cause’ than on ‘result’, he concluded by saying, “Chase excellence, Success will chase you”.

Delivering the keynote address, S. Sandilya, President, SIAM and Chairman, Eicher Group said that the automotive industry in India has made long strides in all facets, as the entry of all global majors and the massive response to the 11th Auto Expo go to show. With automotive sector going through the transformation constantly, building & strengthening relationships an ecosystem would be the way to tackle the challenges.

Addressing at the Motivational Session for the young generation, Gnanvatsal Swamiji of Swaminarayan Temple, Mumbai advised young automobile dealers and new entrants in auto retail to work hard and follow ethical practices in business.  No business can survive and sustain for long without honesty and ethics.

The single biggest challenge for the stakeholders in automotive sector, which emerged from the deliberations, is the shortage of trained manpower. A message that emerged loud and clear was that customers’ loyalty cannot be taken for granted with growing awareness and all-pervasive Internet and IT. Addressing the challenges of shortage of manpower and customer relations required out-of-box thinking. Instead of traditional practice of employing people with aptitude, people with attitude and passion for automobiles like students and housewives could be employed part-time. Likewise, extensive use of social media networking and Internet could come handy for constantly engaging the customers.

Earlier welcoming the delegates, Vinay Nevatia, Chairman, Auto Summit 2012 said, “Somewhat subdued sentiment currently has led FADA to the theme - ‘Shifting Gears - Terrain Ahead’ of the 7th Auto Summit, indicating that the auto market is to alternate between buoyancy and downturn as we move ahead.  Automotive dealers need to be prepared to shift gears according to the situation encountered.”

Nikunj Sanghi, President, FADA delivering his address said, “With a combined turnover of around Rs. 360,000 crores, auto retail is 3-4 times of the size of rest of organised retail. The unfortunate part is that while rest of the organised retail steals the attention of the Government, politicians and the media alike and hogs headlines with unfailing regularity, auto retail that is 3-4 times larger than so-called organised retail hardly gets the attention it deserves and has no nodal ministry in the Central Government to address its concerns.”

Rakesh Jain, Director, Auto Summit 2012 while thanking the guest speakers and participants said that the two-day engrossing deliberations at the Summit had been revelations and enriching experience for the participants, especially, automobile dealers.

An impressive array of speakers representing auto industry & trade, Government, internationally renowned consulting firms and management gurus from within India and abroad, including Stephen Wade, Chairman, National Automobile Dealers Association (NADA) addressed and interacted with the participants at the two-day 7th Auto Summit of FADA. The Summit evoked massive response with over 800 delegates from India and abroad comprising automobile dealers, representatives of manufacturers & allied businesses and media, attending the convention.


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