FADA President's Message June 2004 On the Move Deshnidhi Kasliwal The new government at the centre after much political commotion now appears to have got down to the governance of the country. The Common Minimum Programme has finally been given a shape after a number of sittings of coalition partners. CMP envisages a 7-8 per cent GDP growth and a huge investment in power and rural sectors to give impetus to the manufacturing sector with a view to generating employment. The thrust on employment, while not new on any government’s economic agenda is a positive step and it is hoped that the economy will build on the momentum picked up in the previous year. Meanwhile, CSO has released the growth figures for the financial year 2003-04. It is good to note that the industrial growth of 6.9 per cent in the year was driven by manufacturing sector, which grew at 7.2 per cent. If the industry is able to sustain this kind of growth trends, it augurs well for the economy as a whole and automobile industry in particular, which has already been moving in a high gear. What is comforting is the fact that all segments of automotive industry are in a double-digit growth mode in the second year running. If the trends for the months of April and May are any indication to go by, we expect to witness a growth of about 20-25% in commercial vehicle segment, 15-20% in passenger cars and 15% in two-wheeler segment in the year 2004-05. The only factor that I fear, could act as a speed breaker in the growth path of industry is the rising oil prices. The decision by OPEC to increase the production quota of crude notwithstanding, the uncertainty continues to dog the nation and the industry alike. The prices of petrol and diesel have been hiked by Rs. 2 and Re. 1, respectively, though oil companies were demanding a price increase in the region of Rs. 4 for petrol & Rs. 2 for diesel. Welcome relief is that the oil prices in international market have started moving southwards of late. In view of such price volatility and uncertainty, it is high time, we looked in right earnest at the option of alternative fuels, which will not only address the issue of energy security and foreign exchange outgo, but will also bring in environmental benefits. The role of Government in promoting the development and usage of alternative fuels is very important. There is a need to introduce liberal fiscal incentives for promotion and usage of alternative fuels. This forms one of the suggestions made by FADA in its Pre-Budget Memorandum submitted to the Union Government. Other major recommendations of FADA in the Pre-Budget Memorandum include: Rationalisation of excise duty for all types of vehicles, including passenger cars at 16%; Simplification of and uniformity in registration procedures, including delegation of registration of vehicles to automobile dealers across the country; Uniformity in road tax, particularly life-time road tax on non-transport vehicles; Incentives for creation of parking facilities in the cities for decongestion of roads, etc. We fervently hope that the Government will adopt these suggestions while drafting the budget proposals to give further stimulus to the growth of industry. I would urge my fellow dealers to get in touch with the concerned authorities in their respective regions/States to sensitise them on these issues. I am sure, being an influential segment of business and society, you will be able to put across your views not only at the State levels through legislators and bureaucrats but also at the Centre through newly elected Members of the Parliament in your respective regions/States. The viability of automobile dealers, a cause of concern for all of us, continues to be high on FADA's agenda. A consultant has been engaged for conducting systems audit of dealerships in north India to begin with. The study will be replicated in other regions depending on the experience gained during the first study and major findings emerging out of such audits published in FADA Journal for the benefit of automobile dealers as a whole. While on the subject, I would like to express my profound thanks to Mr Anand Mahindra, Immediate Past President CII and Vice Chairman & Managing Director, Mahindra & Mahindra, who has kindly agreed to share his thoughts and wisdom with automobile dealer fraternity through the medium of this journal. His message is published elsewhere in this issue. Mr Mahindra has provided highly valuable tips for dealership management in the current scenario. He rightly says that we must forget the old and bring in new ideas in our dealership operations. His piece of advice emphasising customer relations, adoption of new technology in dealership operations, formulation of good HR policy, and creating business synergies, is timely and must be taken note of if automobile dealerships have to survive and remain viable in the fast changing scenario. ICICI - FADA co-branded credit card, about which I had already informed earlier in previous issues, is ready for introduction. The ground work has been done and agreement signed. The co-branded credit card, in addition to building the brand equity of FADA and its members, comes with a host of benefits. ICICI Bank will be getting in touch with FADA members soon for the issue of card. I would request you to go for the co-branded card for yourselves, your family members and employees in large numbers to further strengthen the identity of FADA and automobile dealer fraternity. FADA's efforts and initiatives for forging alliances and partnerships with sister organisations in other parts of the world continue unabated. During my visit to London in July, I, along with a few council members, plan to meet the new President of Retail Motor Industry Federation (RMI), UK, to further strengthen our relations and identify the areas of cooperation for mutual benefit. Needless to mention, with trade barriers disappearing, we cannot afford to be isolated from the rest of world. To reiterate, FADA's strength lies in its members. I invariably look forward to receiving your support and guidance in making FADA a more useful and purposeful organisation for the society in general and its members in particular. With best wishes, Yours sincerely, Deshnidhi Kasliwal President