The country's leading SUV manufacturer's sales numbers for August 2013 stood at 37,897 units as against 45,836 units during August 2012.
"Mahindra was bucking the trend inspite of the general slowdown which started last year. This is because the whole SUV sector did well last year. Then came the famous SUV tax which was unfair and considering the economic environment, one would have expected measures which would actually encourage auto industry to grow. Instead came in the 3 percent tax came on SUV," says Doshi.
However, Doshi is optimistic on the days ahead. He says the good monsoon seen throughout the country and the upcoming festive season should boost sales.
Below is the edited transcript of Doshi's interview to CNBC-TV18.
Q: It's been extremely tough times for the entire auto sector and Mahindra & Mahindra was actually bucking the trend for a while but now sadly there are some cracks opening up in the utility vehicle space; tractors have been good but slight bit of moderation there as well. What is your sense on how much more pain this sector would have to undergo before seeing any kind of troughing out?
A: It is interesting. Yes, Mahindra was bucking the trend inspite of the general slow down which started last year. This is because the whole SUV sector last year did well. Then came the famous SUV tax which was definitely unfair and considering the economic environment, one would have expected measures which would actually encourage auto industry to grow but that did not happen. Instead of that, the 3 percent tax came on SUV.
Something which the industry has always accepted is that be it petrol, diesel price hike or subsidies, everything has an impact on the market. Then of course, the interest rates affects because the interest rates in the auto industry are not likely to come down in the near future. There is always a delay in purchase which one should keep in mind.
However, the major factor and this is something which one should keep in mind that it is if one looks at the preceding two years, the 2011-2012 and before that 2010-2011 both the years there were 28 percent growth for the auto industry. If one looks at the arrival of the average strength there would be a correction which would happen.
On the other hand I am very hopeful. If one goes back to the 2008-2009 crisis, one had negative auto industry growth which was at around minus 5 percent and immediately in the succeeding year, 2009-2010 and then 2010-2011, we saw 28 percent growth. I am hopeful that this will recover.
One will definitely not see signs of recovery by September-end. What they call the inauspicious period will come the last 15 days of September going into the first week of October. After that there's Dussehra and Diwali, so there is hope in the third quarter.
There is also hope of a good monsoon and good harvest alongwith a promise that there would be a sufficient level of water retained so the next harvest will be also good. Keeping that in mind, one will see a recovery. I would like to believe that.
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