Maruti Suzuki Chairman: Customers happy to buy vehicles even though petrol costs Rs 90 a litre

Maruti Suzuki’s chairman RC Bhargava says that petrol and oil prices keep fluctuating all the time and this time it has gone up. Their experience shows that petrol prices alone are not necessarily as much of a damper on-demand as the initial taxation on the vehicle when you buy a vehicle and on the terms of financing. According to him, the financing is now much easy and the interest rates are also now much better which is why he thinks people are willing to buy vehicles even though petrol is Rs. 90 a litre.

As you might know, the fuel prices in our country have gone drastically up. In many cities, the petrol is hitting more than Rs. 100 per litre. Some people even started smuggling petrol from Nepal because it is cheaper there. To be precise, it is Rs. 22 per litre cheaper when compared to India. Surprisingly, Nepal imports petrol from India and still, it is cheaper there.

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Mr. Bhargava also commented on the scrapping policy that will soon come into effect. He thinks that the scrappage policy is good because it recognizes the importance of maintaining the vehicles properly. Then he shared his viewpoints on the 5 per cent rebate that Nitin Gadkari, Minister of Road Transport and Highways announced earlier. RC said that the policy will not come to effect for at least 3 more years. A lot of discussions will take place with the government. He also says that the scrapping policy requires a proper infrastructure and a proper operating system.

For your information, the government will be setting up scrapping centres which will come under Public-private partnership or PPP. In it, the government will help private partners to assist in setting up the centres. The tests will be automated so that there is no human interfere, corruption or fudging of data. The vehicles that fail to pass the test will have to face penalties and they could get impounded also.

He also made a point regarding the 5 percent rebate. He said that the 5 percent discount is only advice to the industry. This needs further discussing with the government. If people start scrapping the vehicles that are still fit to run on the road and it was done to bolster the demand as it happened in many countries in the past that for a temporary period, the government gave incentives for vehicles to be scrapped. Why should a customer be given any incentive if the vehicle he scrapped is unfit.

Mr. RC Bhargava understands that there will be some mistakes that will happen at first and then the correction will be applied until we reach to a perfect solution. He says that we all would need to be more accommodating and understanding as we will not get it 100 percent right on a first go.

Other manufacturers like Renault has also supported scrappage policy. Commenting on the scrappage policy, Mr. Venkatram Mamillapalle, Country CEO & Managing Director, Renault India Operations said, “This is indeed a historic moment in the Indian automotive sphere and will go a long way in setting new benchmark for India in the Global context. We are on the cusp of a major breakthrough in the industry, firstly we saw advanced emission standards being adopted by the sector and now a move that is momentous on multiple fronts, besides presenting a huge business opportunity for the OEMs, the social impact of this move will be revolutionary, employment generation, significantly reducing pollution and bolstering road safety are just a few amongst many that come to mind.

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