Tata Motors Ltd managing director Ravi Kant, who is also the outgoing president of industry lobby group Society of Indian Automobile Manufacturers (Siam), said the auto industry is currently sitting on high idle capacity. He also said in an interview that most serious external factors for the sector are the economy and infrastructure spend, but there has been a greater understanding between the government and the industry. On his company’s small car TataNano, Kant said that the demand for the small car was huge but the production was limited. However, he added that Tata Motors would by mid-2010 produce Nano at its full capacity of 20,000 units a month and he was not worried about order cancellations. Edited excerpts:
Clear goal: By mid-2010, says Ravi Kant, Tata Motors will reach capacity production of 20,000 units a month in the case of the Nano. Ramesh Pathania / Mint
You’ve probably been spearheading Siam at the time when the situation for the auto sector has perhaps been the worst that the country has seen in a long time. As you leave this chair, are you cautiously optimistic? Are you feeling more confident about the situation as it stands?
Yes, I think so. Last year was quite bad and especially Q3, (the third quarter) which is the October-December quarter, the industry went through some very wrenching times. But hopefully now things are working out somewhat better.
There are still some segments like commercial vehicles that are under stress. But two things have come out quite clearly. One is I think the government has come out very strongly and has worked with industry, has listened to the woes of the industry. It is not that we have just been asking for anything. We have been giving a lot of logic and there has been a very open and frank discussion and a lot of items in the stimulus packages one and two were announced, which were beneficial to the industry. So I think there has been a greater amount of understanding between industry and government during this period, which I think is a very positive development, if I may say so, out of this crisis.
The other is I think like in any crisis, the industry then begins to look at things it would normally not do. Internally, at cost and new products and things like that, and I think a lot of work has been done there as well, which will now show up as the market begins to expand.
In the long run, I think the auto industry has a very strong future as far as India is concerned, no question about that. The automotive mission plan, which was unveiled by the Prime Minister two years ago, has really all the strong points and I personally have no doubt about it that we will see a very bright future.
Would you envisage single-digit growth till the end of this year and perhaps double-digit growth only as far as 2010 is concerned? Would that be your prognosis given the situation on the ground?