Going by what our customers and partners say, sentiments in the market are already better and expectations from the Government are high. This is because many people believe that a stable Government with a strong majority will move things forward.

In our case, the first half of our May sales was slow and the second half better. It is clear that customers need a positive momentum to invest (in cars) and we saw this mood move to a higher degree in the second half of May.

There is a different sentiment now and people are thinking of future projects, investments and spending more.

From my viewpoint, what is needed for India is a lot of investment in infrastructure and I am not talking about roads alone.

The rapid economic development which happened in some countries across the world can be done in India too, as long as this level of investment in done on a higher level.

This should be on the priority list. Two, taxation and customs duty are other vital issues for the auto sector.

In India, our buyers pay high prices for luxury cars and this has to do mainly with high taxes and customs duty compared to what they are internationally.

I believe there should be some relaxation and, likewise, there should be no hike in excise duty. I have heard voices within the industry about how there was no effect on sales (to the Interim Budget’s duty cuts).

This effect cannot happen overnight.

Three, when it comes to the environment, Indian roads have many old polluting vehicles. What worked in other countries were the cash-for-clunkers programmes where you got old cars off the roads and brought new models in.

This has had many positive effects with the first, of course, being on the economy’s health.

You see the environmental benefits almost immediately simply because you cannot compare a modern car to something that is 20 years old.

Finally, India needs more jobs to ensure future prosperity.

(As told to Murali Gopalan.)

Eberhard H Kern is MD and CEO, Mercedes-Benz India.

Related Topics
comment COMMENT NOW