'Make in India' was the Battle Cry
some years ago. Every manufacturer around the globe made a bee-line for
India.
However, the ground reality was far
different from the promises. Gradually, over the years speed breakers
emerged. The must have been serious enough for General Motors and Ford Motors
to have shut shop and quit India. G.M. and Ford are two of the most
important auto corporations in the world. This is not a good indicator of the
economic downturn in the country.
Following them was a lesser known
mo-bike company, Cleveland Cyclewerkes, yes, that's how they spell their name, from
Ohio, USA.
Worse was to come! Toyota, the
world's best known and most respected name in the auto world suspended plans for
new cars in India and put an end to fresh factory investments.
Reason; prohibitive taxes which made cars expensive for customers. As such, the
slack demand has resulted in the factory not utilising their resources to optimum
use.
Says Shekhar Visvanathan, Vice
President of Toyota Kirloskar Motors, “This is a sector that generates a lot of
employment, goodwill and lots of export potential.
“The message we are getting after we
have come here and invested money is that we don’t want you!”
Really harsh words. Harsh enough to
rattle the establishment. There must have been back door meetings because
within 24 hours Toyota was dancing to a different tune!
“Toyota Kirloskar Motors would like
to state that we continue to be committed to the Indian market and our operation
in the country is an integral part of our global strategy,” Toyota Kirloskar
Motors said in a statement.
Vikram Kirloskar, tweeted that Toyota
will invest more than Rs. 2,000 (Two
thousand) Crore over the next twelve months.
So there! Oil on troubled waters.
Not so for Harley-Davidson. Ever
since the famous motorcycle company came to India they have been running the
gauntlet. Even President Trump complained that Harley-Davidson was being
singled out for unfair treatment. Anyway, enough is enough they said. Last week
they downed shutters and are heading home. Maybe a Joint Venture with Hero
Motors is in the offing. Nothing confirmed.
Informatively, Harley-Davidson
exiting will involve a loss of 2,000 jobs!
So, what ails the auto industry which
came to India en-masse with great expectations?
Gurpartap S. Boparai, MD of
Volkswagen Group India said it in very simple words. “India lacks in ease of
doing business!” This statement covers a multitude of sins.
The Volkswagen Group consists of
Audi, Skoda, Porsche, Lamborghini and Ducatti, the mo’bike.
Interestingly, Mr. Boparai’s comments
came as V.W. announced a fresh investment of Rs. 8,000 (eight thousand) crore
in India.
The reasons that Mr. Boparai gives are
twofold. On doing business he says, “It is not easy to operate and it is not
easy to run the business. While clearances are for initial investments, it is
difficult to do business thereafter. The ease of doing business has to be
expanded to day-to-day running of companies.”
On policy decision he says, “You need
to have a roadmap and policy which runs from less than 3 years to a decade. You
can’t tweak policy in every budget. Our plans get disrupted.”
In plain speak; an expert economist
is required.
And now the good news. Passenger
vehicle sales in the country rose by 14.6 % in August to 2,15,916 units
according to the Society of Indian Automobile Manufacturers. This is after a 9
month period of stagnancy.
