Auto sector seeing the worst downturn in 3 decades, says TVS Motor’s Venu Srinivasan

Venu Srinivasan, chairman of TVS Motor Company, spoke to CNBC-TV18 about the slowdown in the auto sector.

According to Srinivasan, "It will take at least another 3-4 months before demand revival is seen."

“Government has announced some schemes and increased bank funding but that has to come through as lending and buying,” he added.

Given the current stress, Srinivasan said, “Government will have to 'stoke the fire' to get buying to go which means they have to do some of the fiscal expansion. I know there is limited elbowroom for the government but in a crisis like this we have to give a palliative measure and this money can be invested wisely in infrastructure.”

Talking about the need to cut GST rates, he said, “On 2-wheelers it’s at 28 percent, same as a high-end luxury car. I think that anomaly needs to be corrected and we have seen that every time the government has corrected the GST, there has been an immediate expansion in the market.”

On the inventory front, the chairman said, “We have tight control on our stock and we are confident that we will come down to 30 days stock by end of the festive season.”

About the industry, he said, “I hope that the 2-wheeler space will start growing in January and that’s the hope that we have and we hope the government will incentivize it both with GST plus a big infrastructure programme.”

Speaking about the downturn, Srinivasan said, “This is the most serious downturn I have seen in my lifetime or in my career in the last 30 years. Therefore, the government has to take stronger measures this time than in the past. This downturn is steeper and more spread across all sectors.”

According to him, the government plans on electric vehicles (EVs) caused a lot of concern. However, much of this has been dealt with.

"We don't believe electric vehicles are currently economically sustainable", said Srinivasan.