Venu Srinivasan, CMD, TVS Motor Company and President CII talks to ET Now on the present scenario of the two-wheeler segment of the auto industry and how the competition from China is affecting them. Excerpts:
Is the auto sector slowing down because if I look at the recent trends, auto sales are not looking all that strong and cost pressures are mounting?
This slowing down would be predicted as earlier 6 months ago because when you look at the macroeconomic picture in India, the fiscal deficit is climbing, government borrowing is climbing and inflation is very high and the only step the government was taking was to put up interest rates. Now while interest rates is squeezing the consumer's ability to buy, the inflation is stubbornly high and not coming down because a lot of it is international commodity driven and I am not convinced that only one action to put up interest rates is going to bring down inflation. It is going to squeeze demand and therefore inflation of manufactured products may come down because we may not be able to pass on the cost increases to consumers. But all your food and metals and energy which are internationally driven are going to remain high.


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