Uncertainty Persists

Vehicle sales in September 2015 can, at best, be described as a mixed bag for the auto market. Two-wheeler and LCV sales continue to be sluggish, indicating that the economic activity is yet to gather pace and that the uncertainty is still haunting the people. 

The erratic monsoon for the third consecutive year has not helped either. A below-par agriculture growth will have a telling impact on rural demand, which is already showing signs of faltering due to consecutive bad monsoon, falling product prices and stagnant wages. Three consecutive monsoon shocks have resulted in significant erosion in farm income. 

Though agriculture sector accounts for 17 per cent of India’s GDP, there is no gainsaying that almost half of India's GDP comes from rural areas. About 40 per cent of India's households engage in agriculture and within this group, two-thirds are heavily reliant on it. The embattled rural economy remains a cause of worry for the auto market. Therefore, to expect auto market to return to high growth trajectory anytime soon, will be a far-fetched idea at this stage.

The good news is that inflation remains benign, so do the petroleum prices. The experts opine that the crude oil prices have bottomed out and are going to climb up hereafter, though.

Another piece of good news is that the Indian economy is slowly but surely gaining traction. Though International Monetary Fund (IMF) has cut its growth outlook for India for this fiscal year from 7.5% to 7.3%, yet said that the country is on track to remain the world’s fastest-growing large economy. Despite monsoon rainfall deficit, India's agriculture growth in this financial year could be around 1.5 per cent, marginally better than 0.2 per cent of 2014-15, because of some support from the allied sectors of horticulture and livestock, rating agency CRISIL has concluded in a report released recently. This portends well for the Indian economy and auto market.

Regarding FADA’s activities, we have had some breather after FADA’s Annual Session and AGM in my hometown – Vijayawada in September 2015. However, you may rest assured that we are working on a number of activities and initiatives simultaneously. These activities will take shape soon.

Preparations for FADA’s mega biennial event, viz. Auto Summit 2016, scheduled for 7th February 2016 at New Delhi during Auto Expo, have already started in right earnest. The theme of Auto Summit 2016 is: ‘Digital Dealer’. Participation in the deliberations at the Summit will not only equip my fellow dealers to stand up to the challenges arising from the digital world, but is also in sync with our Hon’ble Prime Minister’s vision of Digital India.

Another major activity that is engaging most of our attention is the 7th edition of Automotive Dealership Excellence Awards (ADEA 2015). The awards presentation ceremony for ADEA 2015 has been dovetailed with Auto Summit 2016. Entries for ADEA 2015 will be thrown open soon.

I appeal to my fellow dealers to avail this unique opportunity and register for the Auto Summit 2016 and participate in ADEA 2015 in large numbers.

I am happy to inform that furnishing of FADA’s new office adjoining its existing office is largely complete. The inauguration of the new office is scheduled for 28th October 2015. I would urge my fellow dealers to join me in Pooja for the new office of FADA at 9.00 a.m. on that day. We need your blessings. The expansion of FADA’s office has been undertaken with a view to taking care of the growing activities of FADA and meeting the ever increasing expectations of its constituent members.

Please feel free to send your suggestions and inputs.

With best wishes for the oncoming Navratris and long festive season,

Yours sincerely,

K V S Prakash Rao

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