Aarey, Quo Vadis?

Quo Vadis?  It is a Latin phrase meaning “Where are you going?”, or more precisely, “Whither goest thou?” First, let me get the facts aside, then we will discuss it. Every metro system needs a yard to keep the trains, do repairs and maintenance, and to clean, etc. It is a technical requirement of the system. Currently, there is a significant dispute created by the so-called environmentalists! Aarey Colony has 450 thousand trees in the overall area, out of which the 2600 trees need to be cut for constructing the facility. I am not an expert in this field, but it is elementary maths that a minuscule number of trees are required to be chopped. Let the experts claim whatever they want to say, but it is no disaster.

If we consider the experts first, there will be some who are really knowledgeable persons; some have pseudo-knowledge. When there is chaos, politicians and celebrities are bound to jump in, especially as the Maharashtra state elections are only two weeks away. Politicians are supposed to be experts in every field anyway! Out of this group of people, some stay in new condos, and others live in older condos. My question to those living new condos is, was no tree cut to build the new condos? Did you complain to authorities and go to the courts to stop such projects? I am confident that in all new condos built surrounding the area of Aarey, more than 2600 trees must have been cut! Where were you, sir, at that time?

When a project of the importance like Metro, where costs are very high, every delay increases the cost of the project. All such projects are conceptualised by a large team of experts from every field, including environment experts. I am aware of the concept as it has been explained to me by my classmate Shashikant Limaye, who is a Mentor for the Pune Metro project. Then there are the green tribunal and the forest department. Permissions of all concerned departments are taken before environmental actions are taken! The beauty of the democracy (or the worst part?) is that in spite of following all the procedures, protestors can still go to court. These people went to various courts, and Mumbai high court finally gave a blanket clearance for cutting the trees.

https://www.indiatoday.in/india/story/aarey-forest-tree-cut-felling-metro-bombay-high-court-pils-protest-1606393-2019-10-04

While providing this verdict, Bombay High Court also imposed a fine of Rs 50,000/ on Shiv Sena Corporator Yashwant Jadhav, who had filed a plea against the tree authority’s approval to cut over 2,500 trees for the Metro project. Jadhav was a member of the tree authority.

Various questions came to my mind while reading about this episode! Do these “knowledgeable” people collectively understand the whole affair better? Some of them are experts in environmental aspects, but do they have the grasp of the overall project? The question is not only about the grasping, but there are many other aspects which you should know. I am giving the information provided by the BMC in the court about Carbon footprint.

Terracon aims to be India’s leading ecological solutions & natural resource management strategic consultancy firm. Its strengths include its technical knowledge and capabilities in the domain of ecology, botany, agriculture, and environmental science, as well as its deep understanding of today’s sustainability issues and the ability to design forward-thinking sustainability strategies.

http://www.terraconindia.com/

The Terracon report was submitted to the BMC recently. It says, “Each metro trip will result in a reduction of 324 kg of carbon dioxide.

One hundred ninety-seven fully loaded metro trips will suffice to offset the annual increase in carbon emission of 63,953 kg from the removal of 2185 trees, which are proposed to be cut.”

It further states, “The Metro III operations would cover the annual carbon sequestration by 2702 trees within four days of operations and the lifetime carbon sequestration of 2702 trees in 80 days of operations.”

The people protesting against the chopping of trees are aware of these studies as these reports were submitted in the court! That is why my title, “Quo Vadis?” What do you want to achieve by the adamance? As soon as the Mumbai court gave the clearance, within a couple of days, trees must have been cut by the Metro team. Still, the protestors have now gone back to appeal to the Supreme Court. The court case is about the felling of trees not stopping the shed work. Now that most of the trees are chopped, why do you want to continue the fight? The usual issues of, we know the best and the Ego come into play. All government authorities, agencies, Environmental Companies and the whole list of experts are ignorant according to these people.

We are not even discussing the convenience of Mumbai’s travelling people, who have currently no choice but to be in the current train compartments as if they are packed Sardines. There is a proven statistic over the years that ten people die every day in railway accidents due to ever so increasing crowding in Mumbai trains. Three thousand six hundred fifty people dying every year are less important than the twenty-six hundred trees.

Years back, there was a similar issue in Pune about road widening. The Industry doyen S L Kirloskar had asked a simple question, “Are trees for us or we are for trees?”

NalStop1

Pune traffic during rush hours.

A similar problem is lingering Pune about a road on a hill, which will cause a tremendous change in pollution, for 20 years. Environmentalists are creating difficulties one after another. The courts have been very stringent about tree felling activity in general. They ensure that if ten trees are felled, anywhere between 60 to a hundred new ones are planted. Courts also make sure that these agencies ensure and report that at least 90% of the newly planted trees are surviving.  Pune Corporation agreed to plant ten times the number of trees chopped; the “anti-development” people make use of the slow court system to ensure that the project will get delayed as much as is possible. Hundreds of thousands of vehicles that need not come to an area called Nal Stop are forced to come there, causing traffic snarls, jams and massive pollution in that particular area. Only God knows what their agenda is! There are many cities or towns on and in the hills. San Fransisco is the prime example of a major city on the hills.

Such groups exist all over the world. Some are really doing good work but most cause nuisance and create trouble for projects like Metros, which are Carbon “positive.” The human race has created many systems during the last hundred years that have made our lives much more comfortable. But later on, humans understood that during this development phase, some significant mistakes had been made, for example, global warming, plastics, and so on. Governments of the world (except it seems the US Govt) have accepted that there is a problem. Nations are correcting these errors, but the process has just started.

In many cases, solutions are also known. For example, in one-time-use plastic items, large investments have been made; so these investors are naturally going to resist. Even they want to go away from such products; but it will take some time to achieve the goals. Human race especially should know! A human takes nine months to grow in the mother’s womb before it is born. Once the corrective action process takes momentum things will move fast.

These anti-development groups are doing one vital work. They ensure that others do not forget that ecological mistakes need to be corrected as fast as possible. But they should choose the right causes. Mumbai Metro is a Carbon positive project and is going to help millions of people like you and me due to reduced pollution, and ease of travel. Most important is that people in Mumbai can travel in Metro like humans and not cattle!

A few friends were having a cup of tea in Mumbai near Aarey! All were smoking! One of them says while releasing the smoke, “This tree felling is bad, it will add to CO2 in Mumbai!”

Friends, please protest, reminding everybody of the ecological devastation of the earth is definitely essential; but be practical and become “a support group for Ecologically friendly and positive projects”! Get blessings of Mumbai train travellers and not their curses!

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ERP- Enterprise Resource planning!

I felt that some complex subjects also should be known to more people; hence, I have tried to use the least possible technical language while explaining ERP. 

In my software business, we had developed an ERP called DMS, Dealership Management Systems. It was specially designed for vehicle manufacturers’ dealers. I am sure many of you may have used similar software, and a few of you may have taken part in developing such systems. Many of you may have taken part in implementing such systems. World leaders in this field are SAP. After SAP are Microsoft Dynamics, Oracle et al.  

Enterprise resource planning (ERP) is the integrated management of core business processes, often in real-time and made easier by software and technology. ERP is usually referred to as a sub set of business-management software — typically a suite of integrated applications—that an organisation can use to collect, store, manage and interpret data from many business activities. 

ERP

You must be wondering how come I have switched from blogging to share information about a technical subject. But remember that all the grocers, chemists, restaurants, cigarette vendors almost everybody needs ERP. This ERP that I am talking about is not a software. But people track things manually, or they have information in their mind. Every business must know about stock, consumption, money receivable and money payable and many such things.  

When I go to my chemist, he still does not use an ERP, anything that is sold by him is noted down in a notebook. I am sure he must be maintaining his daily stock in some chopdi. Every day morning, he must be balancing his stock book, ordering the items. He must be aware of the delivery time and consumption pattern of various items. With this data, at least with my chemists, it is very rare that he does not have required medicines in stock. Or else he must be overstocking it! It will create a problem for him because he may not have money available to pay to his vendors on time. To avoid such situations, these folks are busy from morning 9 am to 11 pm, with a quick lunch break in between. They keep on tallying figures manually what an ERP does automatically.  

When I go to grocers, again, it is the same situation. Their shop and Warehouse, I am sure, is always wellstocked. Still, the same story will be repeated with him. One thing is sure you need to do is to keep track of these things either formally or informally. Formal tracking is done by ERP’s. 

ERP’s are used by large, medium and small-scale organisations. When the business software started evolving, initially there were separate software modules for Purchase, Sales, Stores, Production, Accounting, HR departments, and so on. In such cases, tracking and interlinking of everything must have been onerous and cumbersome.

IN DMS, when a vehicle is sold by the dealer, its inquiry is the beginning of the process of sell. When the Invoice is created by the vehicle manufacturer, the vehicle is born outside the dealer system. But for vehicle manufacturer’s internal system, it is born when the vehicle is produced, and the unique chassis number is allocated to it. The beauty of the ERP is that once the vehicle is born and dealers use ERP, the unique chassis number is never required to be entered in the system. It is always retrieved from the data available. This number is used to create an invoice on the dealer (Through SAP), to create an invoice on the customer, to create job card in the workshop, to create warranty claim, to create coupon claim. It is also required to process parts orders for accidental vehicles. Any error in punching chassis number would have created linking issue; followed by emails and phone calls and so on! ERP has solved such problems permanently.                   

We developed the ERP for dealers of vehicle manufacturers. We always got our software approved by the vehicle manufacturers, so that all the business and statutory rules were followed by dealers. I am not going to write about technology or technical aspects or complexities of coding etc.

Our ERP had CRM for basic inquiry management for the vehicles, Sales module for Vehicles and Spares, Workshop management, Accounting, small HR module. For exporting vehicles out of India, the system could handle complete inquiry and Sales aspect. A customer suggested that local dealers should not be allowed access to Export chassis and parts. Export vehicles were sent to the Docks by road. On the way to the docks, sometimes there was a need for workshop support. We had to design a system by which dealers were given access to specific export chassis, based on an incident. It was under the control of vehicle manufacturers.  

For a vehicle to be repaired under warranty, it had to be under specific km or engine hours. But in real life, this never happens. Hence, we suggested that there should be tolerance provided for distance travelled or hours of engine usage. There was one more issue in this. Sometimes odometer (it displays the total distance travelled in its lifetime ) was required to be changed in between, during the warranty period. It worked usually, but for the warranty system, we had to store and add old odometer reading plus current odometer reading. 

There was one situation which we named a Mudflap incident. After the work was performed in the workshop, invoice created and paid for; the person would say, “Oh! I forgot to tell you about Mudflap change”. Such an issue or something similar was a very common issue, but we always found a solution by tweaking the design!  

Following two examples are from the system sold to private workshops. One tricky but the real-life problem had to be handled, especially in the car segment. Many a time the car was sent by the owners with the drivers for repair. These drivers would demand some cash from garages. Now, this is a tricky situation. We created a procedure. If the driver required Rs.1000/, then the system would issue parts worth Rs.1000/ in the Job card. However, the system only included those parts for the billing purpose. But it was never considered in the inventory.  

One thing we learned from this system. Users know the use of the system better than people like us who develop the system. One day one of our customers called to thank me. I said that it was our job to provide excellent software. He told me that your new procedure could be used beneficially in engine overhauling procedure. He said, “What we do is when we overhaul an engine, at least 50% parts are reused. We show that these parts are also as “issued” for billing purpose only, though they were reused!” We never knew that we had created this procedure for the engine overhauling purpose — this facility we never provided in the “official” software of vehicle manufacturers for obvious reasons.  

There was a misconception about vehicle history. History is for the chassis number and NOT for the customer. Vehicles do get resold, but their history does not change. Many parts get changed during repairs, but chassis number is never replaced. 

In the DMS for vehicle manufacturers, we had done a lot of automation. Dealers created purchase orders, warranty claims from DMS to send to SAP. We had created a system by which this processing followed a workflow and was approved by vehicle manufacturers engineers. At this stage, these documents were called SAP ready. SAP ready documents would go to SAP at pre-scheduled intervals and would be updated in SAP. It reduced the workload on the vehicle manufacturer’s staff of punching the data in SAP. 

Similarly, a lot of data like Master data, Invoices, credit notes was sent from SAP to DMS. This data was DMS ready at the SAP side and would be pushed into DMS at prescheduled intervals. This data also got updated in ERP on dealer side saving a lot of time in punching the data.  

I think I am going a little too much into details but what I want to say is that the software like ERP makes life easy for users, creates a lot of information from the data in the form of reports, minimises errors, makes everything available live! It helps everybody to take decisions on time, thereby providing proper service to customers and helps improve profitability as correct up to date information is always available. 

Now in the last ten years or so, EV’s, driverless car systems collect massive data from the vehicles. The voluminous data has given birth to a new field  called data science! This is a totally different field as it captures the vehicle data directly. ERP is about the commercial side of the vehicles, whereas data science will purely handle the technical side of vehicles. 

To conlude, I only hope that I have tried to explain the process in as simple language as possible. My friends from technical background will of course ask questions but my non-technical friends, feel free to ask me more details.

 

Millennial Work-Life balance!

 

Workfromhome2

The above image is eutopian image of working from home!

In the last thirty years, Work-Life balance has gone for a toss! But there are new generation Millennials who are changing the thinking — a millennial is a person reaching young adulthood in the early 21st century.

Work-life balance is the lack of opposition between work and other life roles. It is the state of equilibrium in which demands of personal life, professional life, and family life are equal. Work–life balance consists of, but it is not limited to, flexible work arrangements that allow employees to carry out other life programs and practices.

The term ‘work–life balance’ is recent in origin, as it was first used in the UK and US in the late 1970s and 1980s, respectively. Work–life balance is a term commonly used to describe the balance that an individual working needs between time allocated for work and other aspects of life. Areas of life other than work–life can include personal interests, family and social or leisure activities. Technological advances have made it possible for work tasks to be accomplished faster due to the use of smartphones, email, video chat, and other technical software. These technology advances facilitate individuals to work without having a typical ‘9 to 5’ workday.

People who began working until the late 1980s were docile people and would accept all the rules and regulations of their workplace. Over a period of time, the demand for work and the employee time started going up and up. Through the 90s, the work graph started going up exponentially. Over a period, it became fashionable to be in office for ten to twelve hours a day, and later it became routine. Slowly the long working hours became the norm; going home at the regular time was jokingly called “half-day” leave.

These changes, plus long travel times, made work-life balance totally imbalanced. Competition in business and rat race amongst employees gave a different meaning to this imbalance. People were getting scared to take a couple of weeks of holiday with the fear that if work moved smoothly in their absence, they could become redundant. Such situations made life even more stressful.

I will share a couple of stories, which I may have shared in some other blogs before. A friend came to my house one evening and asked me if I could spend a couple of hrs with him. It was an emergency. We went out, and he said he was doing very well in his job, but his work-life balance was so disturbed that he did not feel like to going office even for one day. I suggested that he should resign. He did resign his job in a week and got an even better job but with better work-life balance.

Another friend went to the US for work for a couple of months. His daughter was unwell, and there was a significant repair work pending at home. One day we had gone to meet his wife. At that time, our friend called and told his wife that now he had to travel to Germany and he would be in Germany for three months for work. We did not know how to console his wife!

In the first story, the friend did not have a choice, but in the second story the friend was senior enough, and he could have decided to travel back home for a couple of weeks before going back again. Workaholic? Or Who cares?

But I am pleasantly surprised to read about the way millennials are looking at the situation these days. When they look for a job, they look for prospects, salary, benefits and flexible working hours. Flexible working hours are now becoming as important or even more important than the salary. Millennials look at the job as a part of life and not the central part of life.

Workfromhome1

Each human has the responsibilities of the family. It could be some repairs at home, Parents-teacher association meeting, helping ailing parents, supporting the spouse when the spouse has temporary additional work pressure. I also agree that these are also equally important aspects of life. Human should continue to enjoy professional work, but if the work is going to prevent the person from fulfilling other responsibilities or having a yearly holiday, something needs to be done.

We read of many examples where people accept a significant pay-cut to achieve work-life balance. If the money you are earning can never be used for enjoyment or support family responsibilities, what is the point in making that money? For many people, work has become an obsession, long hours and endless struggle to aspire to do better in job. It has caused burnout, unhappiness and gender inequity, as people struggle to find time for children or passions or  any sort of life besides what they do for a paycheck.

But increasingly, younger workers are pushing back. More of them expect and demand flexibility — paid leave for a new baby, generous vacation time, along with daily things, like the ability to work remotely, come in late or leave early, or make time for exercise or meditation. The rest of their lives happens on their phones, not tied to a specific place or time — why should work be any different?

Today’s young workers have been called lazy and entitled. Could they, instead, be among the first to understand the proper role of work in life — and end up redefining work for everyone else?

It’s still rare for companies to operate this way, and the obstacles are more significant than any company’s H.R. policies. Some older employees may think that new hires should suffer the way they did, and employers benefit from having always-on workers. Even those that are offering more flexibility might be doing it because current unemployment is so low in certain parts of the world, and they’re competing for workers, which could change if there is an economic downturn.

But such luxury is not possible for many people. People working on the shop-floor of the manufacturing industry, the police, the doctors and nurses, and many such workers cannot work from home whatever modern technology we invent. But the effect of millennials working for better and more flexibility will affect other sectors. Such cascading effect could make the life of workers better than what it is today.

Jack Maa of Alibaba had suggested to his workers to work 996. Nine to nine every day for six days a week. You may get a very high salary but when will you spend it? When will you rest? When will you have quality time with your family?

But the same Jack Maa has now suddenly changed his advice to work three hours a day four days a week.

https://tech.economictimes.indiatimes.com/news/corporate/jack-ma-says-12-hour-work-week-could-be-the-norm/70892513

With technological advances, this is possible in specific industries. Probably people are thinking in the right direction. I am quite sure that once people get real flexibility in work, they won’t mind working a few times even while they are on a holiday. It is going to be possible because your work tools are available to you, 24/7 at the tip of your fingers.

Imagine you are lying on a seashore surfing both on the sea waves and on the net! A vital customer calls you and requests you to resolve his critical issue. Maybe you will do it because your company is taking care of your flexibility needs. So why not go out of the way and help the client?

That day hopefully is not far and it will be Win-Win situation for everybody!

Deep Discounts or Deep Distress?

DeepDiscounts1

I am as usual caught in a conundrum when I read some stories. On the 15th of August National Restaurant Association of India (NRAI) launched a logout campaign against the deep discount coupons that are offered by these five aggregators Zomato, EazyDinerNearbuyMagicPin and DineoutSince then, more than 2300 restaurants across the country de-listed themselves from these food apps claiming that “discount structure, terms and conditions, by the food tech companies are unjust and unsustainable.” The president of NRAI said that to stay competitive in the market, some aggregators give discount of buy one and get one free. Others have done the same thing differently; they have straight away offered a 50% discount, which means the same.  

The story does not end here. On particular Gold Card membership, such discounts are allowed on one itemBut our desi brain works interestingly. The people go to restaurant A and take starters- 50% discount. They go to another restaurant to take drinks- buy two get two free! Finally, they go to the third restaurant and order the main course- buy one get one free! Using this method, they get the whole meal at 50% discount which kills the business.   

The worst part of the whole thing is that the discounts are being borne by the restaurants and not the aggregators. The association wants these discounts to be removed so that customers get used to not getting high discounts. It is a sort of detox action that is essential, according to the association. It appears that both the sides have understood the problems created by deep discounts and they also know that it will take some time to reach normalcy and come out of the deep discount issue.  

You and I are naturally going to be unhappy with these changes. We have to now look for happy hours or special days to get good discounts. Now, these changes are going to take my outflow back to normal, which I do not like. But we should not forget that such gimmicks never work in the long term.  

I always felt as if I am an uneducated person, though I have run a small business for more than 35 years. Giant organisations like Amazon and Flipkart have been in the deep discount game for quite some time. The difference is that they give deep discounts from their pocket. For years, they offer deep discounts, give Prime memberships and so on. They keep on investing billions of dollars for years. Amazon has never made profits in the last twenty years. But they continue to invest in the business to get more and more customers all the time. Uber CEO has recently made a statement that Uber may never make profits. What is the business model of such companies? Jeff Bozos has become “poor” when he settled his divorce, and his wealth is at lowly US $ 65/ billions. He bought some time back Washington post for an all-cash deal of US $ 250/ million.  

Uneducated me does not understand the principles used in these businesses. Uber charges higher rates when demand is up. But I have seen that as a routine, they charge about 10 to 15 % more than an Auto Riksha in Pune. The price difference between an Auto Riksha and a car can be three lacs of rupees. Many Rikshas give mileage about 1.5 times more than the cars. 

On top of that, Uber takes 30% of the amount we pay to the driver. To me, the driver may break even, Uber’s figures show that they make losses. Other than making vehicles available quickly to us, are they running a charity organisation? Is it not similar to deep discounts offered by Zomato or Amazon?  Or for that matter, Oyo?

Venture capitalists, angel investors, put in their money in such companies. Venture capital is defined as capital invested in a project in which there is a substantial element of risk, typically a new or expanding business. I am sure that those who invest in such companies expect reasonable returns on their capital. By what I have described above, there are no returns, then why are the investments continued? Where is the source for such unlimited funds?  

There is no doubt that Amazon, Uber, Zomato are market disruptors. They have shown the world a new way of doing business, which even 25 years back did not exist. New methods, new ways of doing things make a lot of difference in day to day life. Consider AirbnbThe concept is so good that it is helping people all over the worldIt reduces the cost of travel and uses people’s assets which have been remaining idle.  

Amazon, WalmartJio are gamechanging companies which have made a big difference in our lives. But they are making these changes with their own money or at the cost of competitors. They are disrupting the market and making their competitors think; I am sure the competitors will come up with even newer ideas.  

But this deep discount business with own money or someone else’s money is not sustainable business model. I am not surprised that NRAI has revolted against it. I was talking to someone about these aggregators. It was felt that the aggregators probably sell the data of their customers to make money! When companies like Facebook have done it, what will stop the aggregators from selling data!  

Ultimately, market disruptors come with ideas and business models which were never seen before. But one thing will never changeSuch organisations have to make profits at some stage. Unless, of course, you are an Amazon or an Uber. But don’t forget that Amazon is the market leader in Cloud Computing business; so as a group, they make profitsBecoming Unicorn company (market value exceeding One Billion US $) is fine for publicity; it will help companies get more VC fundingBut if they don’t start making profits, such companies fall in the group of 95 % plus companies, which close down sometimes even without a whimper.  

 

Recession or Cyclic downturn?

The automotive sector in India is under significant stress. Sales are going down drastically in unprecedented numbers. It is a vast sector and has already started giving layoffs, having non-production days- a euphemism for plant closures. A large number of dealerships have cancelled their tie-ups as the business does not appear to be lucrative. On top of this, BS-VI norms will be starting from 1/4/2020, which will cause further stress as no BS-IV vehicle will be even registered from 1/4/2020.

More difficulties will come up during this year and maybe even next year. The reasons for this is that CAFÉ norms will come into the picture from 2022. There is already a discussion of auto companies going slow on investments, but statutory requirements are mandatory, and these companies cannot avoid them. BS-VI norms and CAFÉ norms will increase the prices of cars. One thing that never comes into the discussion is the sale of old vehicles. It is not that people are not buying cars. People suddenly don’t change their habits. But people become practical and smarter.

George Mathew

I will tell you what I mean. I read an article from Indian Express which was discussing the sales pattern in the industry in general. The data in the table is for two thousand plus companies. The table above shows the business figures for April-June quarter comparison of 2018 and 2019. Sales of AC’s are generally seasonal. But other items like TV’s, Microwaves have not shown any decline. Sales are almost normal and have only shown seasonal changes.

I want to write a disclaimer. I cannot “read” the financial data, and hence, I cannot analyse it too! But as a layman, I thought there is not much difference for these two years. The sales have gone up in 2019.  Operating margins have reduced slightly. Depreciation is quite high in 2019, indicating the investments done in the that year. Hence interest paid has gone up maybe due to investments in plant and machinery. Proportionately tax paid has gone down, and profit has gone down. These figures do not show any drastic changes happening in the market. Companies considered in this table exclude banking and finance companies.

Then why is the auto sector in distress? I have mentioned that people have become smarter and practical. In the last financial year, the total number of vehicles sold was large. But the sales of new cars have come down. There is a secondary market where people buy used cars. The total number of old vehicles sold was four lacs more than new cars. Why is this happening? Small cars like Alto are now sold more in three-tier towns. Young people in big cities want to buy bigger vehicles. I understand that a 3 to the 4-year-old big sedan is now available for the price of an Alto. The trend of buying used fancy cars is affecting the sale of new cars.

I am not arguing that there is no recession in the auto sector. But we should not forget that it is one of the most protected sectors in India. Customs duty on cars below US $ 40000/ is 60 % and above this value 100%. The used cars have a customs duty of 125%.  For various reasons, this sector has remained inefficient. After many international companies started coming to India and opened their factories in India, the auto sector had a tough time. Some Indian companies took 15 years to reach the quality levels of global companies. One company that followed a correct way of doing business is Bajaj Auto. They currently export 1.8 million motorcycles every year. It gives them a buffer when the local market sales dip!

Some of the reasons for the downturn could be that main barrier for transport vehicles like octroi has been removed. The action has speeded up the turnaround time of vehicles  substantially. The effect would be that the number of trucks needed to transport material would be less than those previously required. Another reason that is making rounds is that demonetisation effect causing the sales to drop. Is such a large industry dependent on cash? In the rural areas cash was being used to buy vehicles; even large SUV’s were bought using cash. If people had so much cash with them why did they not use bank instruments to pay? The answer is obvious. Not paying taxes honestly is a habit that does go away quickly.

What was the auto industry turnover 20 years back? How much has this industry grown? The auto industry has made decent profits all these years, so I am sure they have reserves. Pollution norms have been known to everybody, so no point in raising hue and cry about investments needed.

Any sector that is in stress always talks of alarming results of the recessionary trends in their business. Should the government give selective help to the stressed industry? Is such action fair to other sectors which are doing okay in their business? The financial stimulus can be a solution, but such money gets diverted from equally essential areas. We should not forget that high tariff on imported vehicles has helped the industry for a long time.

All the companies in the automotive sector are large organisations, and they have the wherewithal to overcome current tough times. Asking for a reduction in GST is a short-term major and is taking a myopic view of the situation. In the last couple of years, the government has been receiving feedback from business about GST. Government has already made changes for the benefit of both industry and the government. Making changes for a specific industry for a short duration is an incorrect way. The auto industry has been generating decent profit for the last few years. Some things have changed; some new variables have come into play. There are who experts can find a solution and suggest corrective actions. I am sure the industry will come out of it.

Raising the alarm, making statements like “It is the wake-up call for the Government of the day” does not solve issues. But the government help should be an exception but not a rule. There is an interesting story about General Motors and Chrysler. When they were in serious financial trouble, a decade ago, the senior executives of both companies were called to Washington DC for discussions. In the initial informal chat, they were asked if they reached Washington the previous night. The surprised executives said, “Oh, we landed only about 45 minutes back. We chartered a plane to come here.” The government official was aghast!

So where is the vendor conference this year? Italy, Las Vegas, Macau? How can you have the conference inside your factory? Cost cutting is for others. I have attended General Motors vendor conference once in Pune. It was at the Oxford club and there were at least six helicopters used by GM bosses to arrive at the venue! It is not a surprise that GM closed their shop in India.