Most established car companies in India are haunted by the current unfavorable car economy period. Car companies have to face rough tunes since profits are dependent on imports to a considerable extent. The Vice Chairman of Toyota Kirloskar Motor, Shekar Viswanathan spoke on the present economic scenario and the strategies that could be formulated by government to improve initial investment effects.
On the problems faced by the Indian economic situation, the reply was other than increased fuel prices, the weakening of Indian rupee for short periods is the main hindrance of economy progressive. The economy has slowed down to an extent that U.S dollar values have become more powerful.
On the present economy affecting profits of companies, Mr. Shekar Viswanathan said, businesses which is centered on import items can manage to carry out normal operations on a large scale even if there is a marginal increase in rupee value by 5%, over a period of at least 3 years from now. The increase or decrease in rupee value is not the prime concern that is affecting sales; the more significant player is the depreciation of Indian rupee to a large extent. The Indian to US currency exchange has risen to 60 from 46 dollars 2 years’ back which has affected product manufacture layouts.
On the movement of business affected by the present situation, the reply was most investors and firms are waiting for favorable periods and pushing the investment plans to a later period, and waiting for rupee value to attain equal power with U.S dollar. Companies are unsure about when the Indian currency value will improve.
On whether lesser interest values will appreciate Indian currency value, the reply was lesser interest values is a practical approach, the Reserve Bank of India (RBI) can perform lesser tasks to elevate the situation if revenue shortages are still high, inflation is another concern that is impacting company profits.
On important measures that could save companies profit images, the response was, government should reduce expenditure and borrowing, RBI can then reduce interest values and higher funds will be obtained for private sector investments. This would be an attractive measure to reduce consumer and food prices, but however some expenses will not be controlled such as defense costs. Tax collection methods should be carried out through efficient technology mediums and tax underpayments should be checked than increasing taxes, the best examples being increase in excise duties for the Sport Utility Vehicle segment.
On the current unparalleled economic scenario, the response was the current situation, is not different from the one in the year 1991. The Indian government should formulate methods to increase Indian rupee value through gold mediums, by pledging a portion of gold to international bank segments and obtain dollars. This would not have a huge impact on rupee and also enhance initial investment settlements. It would not be right to state that these measures would tarnish India’s image. He also questioned the Governments move in the year 1991 and whether selling of gold weakened Indian currency value over the years. Tough measures should be taken to combat bottleneck situations.
Let’s observe the Indian currency trend in future and the strategies adopted by government to elevate Indian rupee value.
This post was written by
I am into the auto blogs field for quite a long time. Living my passion of reviewing cars.
Tagged: Toyota
Leave a Reply