Taking on his counterparts in the automobile industry who have been pressing for government stimulus to tide over the slowdown, Rajiv Bajaj, managing director at Bajaj Auto, said the automobile industry must first look at its own shortcomings.
"Most of the automobile slowdown is the industry's own making," he said, in an interview with CNBC-TV18 on Thursday. According to him, a 5-7 per cent drop in retail sales in the two wheeler segments cannot be called a crisis. He pointed out that companies shouldn’t be resorting to “fear mongering” by talking of job cuts as employee salaries account for just 4 per cent of sales.
Bajaj said that Indian auto products were mediocre compared to world standards and that the sector needs to ask itself if it's done enough to become globally competitive. “A lot of these companies are not able to export because, by world-class standards, their products are mediocre,” he said attributing the mediocrity to companies trying to make everything and not focusing on one segment. “When you will make scooters, and bikes and cars and jeeps and SUVs and trucks and buses and everything under the sun, you are obviously not going to be world-class at anything," he told the channel.
The Federation of Automobile Dealers Associations (FADA) on Monday released the July 2019 vehicle registration data, which showed that on a year-on-year (YoY) basis, the overall sales declined 6 per cent. Two-wheeler sales dipped by 5 per cent, passenger vehicles (PV) by 11 per cent and commercial vehicles (CV) by 14 percent, showed the data.
Bajaj, however, acknowledged that it is a difficult time for the sector and said that the government should not make it worse by raising registration fees. Further, Bajaj said that the focus was on now ensuring that retail sales are as good as wholesales. "We will use the festive season to completely correct stock at the dealership level," he added.