RC Bhargava Interview: ‘Virus should be controlled… Rate cuts made by RBI should be passed on to customers’

Bhargava also said that while sales of Maruti Suzuki cars would be lower this year than in the previous fiscal, it was impossible to realistically forecast the performance of Maruti Suzuki or the auto industry as whole for FY21 at this stage.

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coronavirus, RBI Rate cuts, RBI, Maruti Suzuki, Maruti Suzuki sales, RC Bhargava on corona impact, migrant workers

RC Bhargava, chairman of Maruti Suzuki. (File)

Banks and NBFCs should not be “unduly risk averse” in their lending policies and pass on interest cuts by the central bank to customers, RC Bhargava, chairman of Maruti Suzuki said. Bhargava also said that while sales of Maruti Suzuki cars would be lower this year than in the previous fiscal, it was impossible to realistically forecast the performance of Maruti Suzuki or the auto industry as whole for FY21 at this stage. Edited excerpts:

How has the Covid-19 pandemic and the subsequent lockdown, affected the operations of your company and its personnel?

Like the rest of industry in India, Maruti Suzuki shut down all its manufacturing operations, and sales, in accordance with the orders issued by the central and state governments. Production and sales have recently started, again strictly in accordance with government regulations and guidelines. Maruti Suzuki continued to pay its employees during the period that there was no work.

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What would be the three basic aspects on which government can support your company and the industry in these times?

The sale of cars very much depends on the extent of economic activity in the country.At this stage the most important requirement is that the spread of the virus should be controlled, so that both production of cars as well as other economic activities can move towards normalcy. Customers need financing to buy cars and the rate cuts made by the RBI should be passed on the customers.The banks and NBFCs should not get unduly risk averse in their lending policies.

Workers who have moved away to their villages will need to come back as production of vendors and the industry increases.

What are your expectations on the performance of your company and the industry in the current financial year?

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Since production and sales have only recently started, and there are many uncertainties on how the disease and the economy will progress in the coming months, it is really not possible to make any reasonably realistic forecast at this stage, both for the Company as well as for the industry. Sale of cars by Maruti Suzuki this year will be lower than last year, and the product mix could also change. It is possible that there could be greater clarity after say a couple of months.