Dhruv decodes the impact of GST and Euro VI norms with 'Best of the Year' awards winners

The year-ending issue is always among my favourites. If you’ve kept track of this magazine at all, you’ll know that I’m a petrol-head through-and-through. So, of course, the anniversary issue always gets my juices flowing – especially this year, with the likes of the McLaren, Mustang, Ferrari, Lambo, Triumph and Ducati on the cover. So it’s a little unusual for the December issue to pique my interest in much the same manner, since it involves us sitting down with the top management of each OEM that’s been a recipient of our ‘Best of the Year’ awards.

Needless to say, it’s an incredibly eye-opening experience to get this great wealth of information and diverse range of viewpoints from what is effectively the entire industry – ranging from, in this instance, Lamborghini to TVS. The amazing thing, though, is that there’s far more that binds the industry than divides it.

This year, of course, the hot button issues were GST and the Euro VI norms. For the most part, the industry expects the introduction of GST to lead to transparency, efficiency and, therefore, growth. Some estimates even suggest an additional 2% growth in GDP. But they’re also concerned with State governments and local bodies adding their own cess on top, which would nullify the benefit of price uniformity. The industry also believes that it’s about time the government stopped imposing unduly high taxes on the premium segment. Each of these manufacturers are shining examples of the ‘Make in India’ campaign, and in doing so provide jobs, advance skill levels and bring in advanced technology. Moreover, they satisfy the needs of a segment of the population that’s working harder and doing better than ever before – so why should they be penalised for it?

Euro VI, as well, is leading to a fair amount of concern. Not because the industry doesn’t want to invest in advanced technology, but because they require a reasonable timeline and roadmap so that they can chalk out investment plans and forecast for the future. That said, the environment must take precedence – and the industry has no choice but to invest in order to meet the revised guidelines. Trepidation stems from the concern that the fuel won’t match the quality of the engines, which would be disastrous in this case.

The government also needs to do more to promote the use of hybrids and EV’s. The FAME initiative is a good start, but the incentives need to be far higher in order to make any kind of a real impact. And looking at the air quality in our big cities, we can’t afford to wait any longer!

Despite the diesel ban in the NCR, the industry has still grown this past year. There may be an initial slowdown next year as people wait for clarity on GST, but the expectation is that growth will be back on track thereafter. Most folks in the industry seem to be a lot more pragmatic when compared to a few years ago – which was a time when people still had stars in their eyes when talking about the Indian market.

Pragmatism is good though – especially when it’s coupled with an environment that promotes an ease-of-doing-business and fosters growth.