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The 49th SIAM Annual Convention at the Taj Palace Hotel, New Delhi on the 28th of August concluded on an optimistic note with delegates taking away a lot of food for thought as well as future action. The day began with Mr. Ravi Kant, President of SIAM laying out the roadmap by elaborating on SIAM and SIAM’s contribution to the Indian auto industry. This was followed by a very positive inaugural talk by Mr. Vilas Rao Deshmukh, Hon Minister of Heavy Industries & Public Enterprises appreciating the work and contribution of SIAM. Mr. Deshmukh highlighted some of the areas that still need an extra push like the commercial vehicle sector which needs attention in terms of renewed investment and also greater emphasis on R&D. He also expressed the need to focus on developing more and better skilled manpower to support the future growth in the auto industry. Prior to Mr. Deshmukh’s address, Dr Satyanarayana Dash Secretary, Ministry of Heavy Industries and Public Enterprises released a film on SIAM. The inaugural session was brought to a close by Dr. Pawan Goenka who delivered the Vote of Thanks.

The day had a number of intriguing discussions starting with a special plenary on Sustainable Mobility – Connecting India: Making A Paradigm Shift. The three speakers were Mr. R C Bhargava, Chairman Maruti Suzuki India, Mr. Kamal Nath, Hon Minister of Road Transport & Highways and Mr. Siddhartha Lal, Managing Director & CEO VE Commercial Vehicles. While Mr. R C Bhargava welcomed the panel and the house Mr. Kamal Nath gave a very positive talk on roads development, setting out both what is on the anvil in terms of goals as well as the pitfalls on the path to achieving them.

The second session dealt with a far more heavyweight subject, Restructuring – Build a Viable Industry Model: Challenges Facing The Commercial Vehicle. Co-chaired by Dr Abhay Firodia, Chairman & MD Force Motors and Mr. Akash Passey, MD Volvo Buses India, the panelists included Mr. Hakan Samuelsson, Chairman MAN AG, Mr. David Bennett the President, Vehicle Group APAC, Eaton Corporation, Mr. Takao Suzuki, Chairman of the Board, Mitsubishi Fuso Truck & Bus and Mr. Prakash Talang, MD-India Operations, Tata Motors. Mr. Talang started the discussion by pointing out how good road networks make a definite difference to industrial growth. Mr. Samuelsson was of the opinion that the medium segment seems to have shrunk while also observing that roads need to be able to take heavier trucks as higher payload capabilities translate to savings in cost. Replying to a question on the requirement of small trucks, Mr. Bennett observed that smaller trucks are usually very successful where the road network is inferior.

The post-lunch session led off with Sustainability – Role of Collaborative Working. The keynote address was delivered by Mr. Jairam Ramesh, Hon Minister of State for Environment & Forests. Some of the questions before the speakers related to the changes in dynamics that come with the shift in the epicenter of growth of the auto industry to Asia. Moderated by Mr. Markus Doerr, MD Ricardo Strategic Consulting and chaired by Mr Siddharth Shriram, Chairman, Honda Siel Cars India and Mr Jean-Marie
Lagey, MD Skoda Auto India. The panelists for this discussion included Dr Bernd Bohr, Chairman Automotive Group, Robert Bosch GmbH, Ms Sandra Pupatello, Minister of Economic Development and Trade (Ontario), Mr. R Seshasayee, MD Ashok Leyland and Mr. Arun Maira, Member – Planning Commission, GOI.

The penultimate session of the day was on REVIVAL – The Current and Future State of the Global Automotive Industry & Positioning of the Automotive Industry in India. Moderated by Jan Miecznikowski, Head Global Automotive Practice, Booz & Co and co-chaired by Mr. Karl Slym, MD-General Motors India and Mr Hiroshi Nakagawa, MD Toyota Kirloskar Motor, the panelists in this session included Prof Dr Jochem Heizmann, Member-Management Board, VW AG, Mr. H S Lheem, MD Hyundai Motor India and Mr. John Parker, Exec. VP – Asia Pacific & Africa, Ford Motor Company. Dr Heizmann expressed the view that Government incentive programs for auto companies go a long way in supporting a company in times of difficulty, citing the example of how sales in Germany had bucked the trend by growing thanks to the introduction of old vehicle scrapping programs. Mr. Lheem and Mr. Parker agreed that infrastructure in India needed a huge upgrade. Mr. Parker added that every time he made a trip to India from China, he would get very agitated about the infrastructure. He was also of the view that taxation laws in India could be smoothened out.

The day concluded with the session on Leadership in the Two-Wheeler Industry. Coming on the background of Asia being the epicenter of growth and India being the second-largest two-wheeler manufacturer in the world, the session was moderated by Dr Nick Rogers, Secy-General International Motorcycle Manufacturers Association and co-moderated by Mr. Sharad Verma, Partner & Director, The Boston Consulting Group, the session was co-chaired by Mr Rajiv Bajaj, MD Bajaj Auto and Mr. Ravi Chopra, Chairman & MD, Piaggio Vehicles. The panelists were Mr. Matt Levatich, President & COO, Harley-Davidson Motor Company, Mr. Pawan Munjal, MD & CEO, Hero Honda Motors, Mr. Toru Watabiki, Vice Chairman, JAMA & Managing Exec Officer, Yamaha Motor Company and Mr. Bingnan Chen, Gen Secretary, CCCM (China Chamber of Commerce for Motorcycles.

And Dr. Pawan Goenka (President of Mahindra & Mahindra) - is now also the President of the SIAM!

Source : SIAM

Scrappage and new cars are good for the environment, but India is not a rich country like Germany or the US.

The industry has recovered from the lows of early 2009, except in CVs. If scrappage incentives are to be given, it should be the industry that must bear most of the burden and not the Govt. (and us taxpayers). Profit levels in the industry are now near normal levels (June 2009 quarter).

High taxation is also an issue, but will the industry support low taxes on imports at the same time as low taxes on domestics. Trade and tax theory predicts that such a policy always results in higher consumer welfare, more Govt. revenues, and transfer of surplus from producers to consumers.

GM already had recently announced a scrappage scheme for Opel products. Aug 2009 sales figs. will tell how far it was a success. That was a company to company (GM to GM) scheme.

Couldn't agree anymore with that. Not to mention, most cars going the scrappage way in India will be li'l Maruti 800s.....a car that's far more fuel efficient than most of the larger hatchbacks / sedans (potential upgrade) in India.

The General can write a book on the A to Z of incentives. Depending on which time period & market you are looking at, GM has pretty much offered every type of incentive possible!

I had already posted before that most of the players in the industry are now reporting near normal profits. If that is the case, do they need further incentives. To prove this, pls. see the excel sheet enclosed for quarterly results for all listed auto makers from qquarter ended Mar 07 to Jun 09.

Operating margin is net sales minus all operating expenses.

1) As mentioned by Vasudeva, it is not a good scrapage scheme is not good for us.
What we need is a better plan that is based on condition of vehicle. Its not impossible, but implementation of this condition of vehicle based scrapping will never be done in India.

2) All other things are nice, but the concentration must be on safety aspect too. We know the HCV in India and they do need real turnaround. Talks might be there, but it never comes out practically.

3) There can be understanding to offer ABS as an option to all the cars. How about crash testing norms coming in ?
It must also be mentioned that cars all over India must be sold with the cars meeting toughest emession norms. E-IV cars available all over country, not just a few Megacities.

SIAM must consult the government for this. IMHO this can also be environment friendly decision.

I wonder what will be the real outcome out of this Convention. Years after years, new tech comes in when emession or safety norms are modified ( like headlight height adjustment, rear seat belts ). CV segment remains unchanged. This is for automotive manufacturers.

Next in the line is ministry. What about quality fuel and good roads. Good roads and quality fuel can be the most environment friendly decision.

Dr Heizmann is from VW/Skoda. I think around 90% of Skoda owners would welcome a scrappage of lemons scheme, whereby long-suffering owners can trade their Skodas (and like the US, they will be put to death) for something that does not cause bankruptcy.