Drastic impact of economic slowdown in automobile industry: Shekar Viswanathan

Shekar Viswanathan, vice chairman and whole-time director of Toyota Kirloskar Motor, claimed that there is a drastic impact of economic slowdown in the automobile industry and the demand for new four-wheeler vehicles has declined.

He was delivering the keynote address of the Annual Manufacturing and Technology Conference 2020 on the theme ‘Navigating in the VUCA World – Manufacturing Industry’, organised by the Confederation of Indian Industry (CII), Mysuru chapter, here on Tuesday. “We used to produce nearly 3.10 lakh cars every year. But, due to declined demand, we are now manufacturing only 1.30 lakh four-wheelers, only 35% of the total production. Almost all of the automobile industry is in a crisis,” he said.

According to him, new generation people are more comfortable hiring cars, instead of struggling to find space for parking. Most of them make use of air-conditioned metro. Thus, the demand for vehicles has declined.

Demonetisation

He mentioned that demonetisation also caused slow down of the economy. “Earlier, people used to get vehicles, including two-wheelers and four-wheelers, by paying cash, the dealers used to have cash counters to count cash. After demonetisation those cash counters are no more, as people do not come with hard cash. This has made every automaker to rethink on their plans and strategies,” added Shekar.

Department of Industries and Commerce (DIC) Joint Director D K Lingaraju said, “The manufacturing industry not only improves the GDP of the country, but provides job opportunities. It improves exports and helps in domestic consumption.”

The state and Central governments are aware of the problems of the manufacturing industry and hence, have come out with various schemes.

“Today, one can get a loan within 60 minutes, if he has all the required documents,” he said.

He pointed out that the government established the Skill Development department to impart training for youths and to produce skilled workers. He suggested the industries to approach the departments to get employees with required skills.

He called upon the industries to form a cluster to obtain more benefits from the government. More than ten industries should come together to form a cluster. There are various facilities and schemes for clusters from both state and Central governments, he said.

CII chairman Bhaskar Kalale briefed on Volatile, Uncertain, Complex and Ambiguous (VUCA ) with respect to the industry. V Eswara Rao, conference chair, was present.