So Far So Good

 

Dear friends,


Auto market has been making a steady headway since the beginning of the year 2016. The vehicle sales that had been dragged down by the uncertain economic environment and rural woes arising from two consecutive years of drought and subdued rural incomes are back on track. Monsoon rains this year have been bountiful so far, giving further boost to the market sentiment.


Normal monsoon rains will not only give impetus to the rural economy, but will spearhead the economy as a whole. Though agriculture accounts for only 16-17% of India’s GDP, its rub-off on other sectors of economy cannot be overemphasised.


Inflation, particularly food prices had been climbing up again in the recent past, sending the Government and the people into a tizzy. It is heartening to note that the food and vegetable prices have started cooling, as a result of the generous monsoon rains. With petroleum prices attaining a semblance of stability, we are going to witness consumer price index, which is hovering at 5.8% currently, easing off to the comfort zone of below 5.0%.


An encouraging sign is that the incumbent Government’s emphasis on infrastructure development and speeding up the policy decision-making has started making impact and the results are becoming visible on the ground. There is a discernible pick-up in road building, electricity generation and mining activities.


Another piece of good news for the auto market is that with the implementation of 7th Pay Commission recommendations, bonanza in the form of increased salaries and payment of arrears since January 2016 awaits the employees & pensioners of Central Government and Railways some time during the upcoming festival season. The State Governments are also expected to follow suit for their State employees. All this augurs well for the auto market.


On the flip side, there is no tangible improvement in private investment. It is largely the public spending that is driving the investment at the moment. Inflationary expectations held back the RBI to reduce the interest rates further in its latest bimonthly monetary policy review. We hope, the apex bank will announce the cut in key policy rates in its next monetary policy review scheduled for October 2016, giving fillip to the private investment.


Adverting to FADA activities, I wish to inform that we are working on a number of initiatives for the benefit of automobile dealers. We propose to revive the training & development programme in a big way.  We are simultaneously working to give shape to the 7th edition of Automotive Dealership Excellence Awards. The preparations for organising the next Annual Session and Annual General Meeting of FADA are also underway. FADA Council at its next meeting scheduled for 27th August 2016 at New Delhi will consider and review various matters and initiatives. The outcome will be intimated to my fellow dealers.


Meanwhile, I request my fellow dealers to kindly inform if they would be willing to organise training & development programme in their respective regions in partnership with FADA. This will help us draw a calendar of training programmes well in advance.


It is gratifying to note that some of the local/regional associations of automobile dealers have undertaken skill development programme. I congratulate Raipur Automobile Dealers Association (RADA) that has recently tied up with an expert agency to create a skilled manpower pool in the State of Chhattisgarh.


Please feel free to send your inputs and suggestions to further improve and strengthen activities, making them more meaningful and beneficial for the automobile dealer community.


With best wishes,


Yours sincerely,


K V S Prakash Rao

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