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Reviving demand and consumption in the auto sector should be the top priorities in the Budget. As someone closely involved in the two-wheeler industry, it is crystal clear to me that customer sentiment is not so great after the demonetisation move and improving this is critical.
The closest analogy I can think of to put this in perspective is a rapid roller-coaster ride. For the first 15 minutes after this hair rising experience, your heart is beating furiously. It is only after that you can breathe a lot more easily and slowly come back to your senses.
The experience of demonetisation has been something like a roller-coaster ride which left people shell shocked and it is only now that they are slowly coming to terms with the new reality. After all, they were used to cash transactions and to suddenly be yanked out of that ecosystem takes a lot of coping.
Yet, Indians are remarkable when it comes to adapting to change quickly. And even while the sentiment is perhaps better than what it was following the aftermath of November 8 when demonetisation kicked in, it still needs to be improved. This is where the Budget can play a big role in easing customers quickly into the new milieu of a digital India by offering them a host of goodies.
Boosting customer sentiment is absolutely critical and he/she should have more disposable income in hand to feel confident about spending on products like two-wheelers. After all, farmers and workers in other sectors found themselves strapped for cash in the days following demonetisation and naturally put off what they considered not-so-essential purchases. The little money they had in their hands needed to be kept aside for immediate priorities like sowing, for instance.
Easier borrowing at low interest levels will help the cause, coupled with more lenient tax sops to boost the ‘feel good’ sentiment among buyers. This will get a further fillip with initiatives like low-cost housing incentives targeted in particular at rural India.
Job creation is the need of the hour and this is where the auto industry plays a big role as a substantial contributor to manufacturing GDP. Boosting local R&D and engineering will play a big role in hiring more people.
(The writer is Vice-President (Sales & Marketing), Yamaha Motor India Sales Pvt Ltd)
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