Click to play videoNew Delhi: The auto industry, reeling under huge cost pressures and dampening sales have come together to request the Government to bail them out in these difficult times.
Both Society of Indian Auto Manufactures (SIAM) and Auto Component Manufacturers Association (ACMA) have requested the Government to look at a redressal package comprising a two to three year "Bridge Policy" to enable the industry survive the current economic crisis.
“We have been talking to the Government for a long time on what we feel industry needs, the Government is well-aware of it. If the exercise don’t go down, if interests don’t go down, how do we cut prices,” says SIAM Vice President and Automotive Biz, M&M President Pawan Goenka.
It is difficult for us to get liquidity out of loans that are already been sanctioned to us, that is number one. Number two is in terms of our working capital limits, there again banks are finding ways and means to somehow stop the utilisation of funds,” says VC and MD Sandhar Technologies Jayant Davar.
Auto companies say that if the availability of the finance for the Small and Medium Scale Industries (SEMs) does not improve Small Scale Industries might not have the lasting power to last for a longer time.
“While the SEMs have already been declared a priority sector, the banks still have fundamental reasons why not to give them money,” Davar adds.
With the global slowdown, Government of most countries in Europe and Asia are given some sops and benefits as a bailout package. For instance EU is getting a bailout package of about $6.5 billion, China is getting roughly $8-9 billon, three US majors have asked for a $25 billion package.
Even the loans that are being given to automakers globally are at very low interest rates.
India’s auto industry is now looking forward to a bailout package from the new Finance Minister Manmohan Singh.
(For updates you can share with your friends, follow IBNLive on Facebook, Twitter and Google+)
displayed with permission. Use of the CNN name and/or logo on or as part of CNN-IBN does not derogate from the intellectual property rights of Cable News Network in respect of them.