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Auto industry policies can't be made in a myopic manner, says Vikram Kirloskar

The auto industry has a longer industry cycle of about 6-8 years. The policies, therefore, cannot be made in a myopic manner of say 2-3 years

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Industrialist Vikram Kirloskar of Kirloskar Group has been the face of Toyota-Kirloskar Motors Pvt Ltd for years, where he serves as vice chairman. In an interview with Shahkar Abidi, he spoke about the automobile industry, the government policies and the effect of demonetization on the company while also shedding light on the recent developments involving the joint venture with the Japanese giant.

So far the Kirloskars seemed to be the sole partner for all of Toyota's ventures in India. But now, Toyota and Suzuki Motor Corp surprised the industry by meeting PM Modi to discuss a partnership between them. Were you kept in the loop?

I got to know about the meeting with PM when it came out in the newspapers. However, I was kept in the loop about the developments happening there in Japan earlier between the two auto rivals. While Suzuki is good in certain things like small cars, Toyota is good in few others like technology, safety, etc. So it's kind of creating a synergy between them for mutual benefits.

Recently, Bajaj Auto MD Rajiv Bajaj criticised the industry on BS-IV emission issue. He also stated that you are on the page with him. Now, Bajaj has taken the legal route. Are you part of that legal recourse?

I will not comment on what Rajiv or what someone else wants to say about BS-IV. Our point of view is that we as a company have always been compliant with all the regulatory laws, whether it is regarding emission, or safety, or anything else. We, as a company, will not be approaching the court on this.

You were among the worst-hit due to the diesel ban in Delhi. Do you believe that the frequent uncertainty over policies is making India a less attractive destination, especially when the government is trying to bring investment through various initiatives?

The various initiatives of the government like the ease of doing business or Make in India are visionary efforts and cannot be brushed aside with criticism, though one can always find problems with the nitty-gritty of it. The auto industry has a longer industry cycle, which can be about 6-8 years. The policies, therefore, cannot be made in a myopic manner of say 2-3 years. It should instead take a long-term view of 10-15 years.

Kirloskars had a difficult time in running the Sakra hospital in Bengaluru which they sold to their Japanese partners in March 2016. Gitanjali Kirloskar was reported saying that her vision of running the hospital was divergent from that of Secon Medical System's (Japan). Were the Kirloskars and the partners not on the same page?

I don't think that is correct. We were three partners in the venture and one of the promoters has a large hospital business in Japan with over 5,000 beds. The reason I got involved in the hospital was to see Kirloskar Systems's technology in the hospital. Once it got developed, we opted out of it as we are not the people who run hospitals. Our partner, which specialises in hospitals, wanted to expand. So, it made sense for us move out.

What has been the effect of demonetization on the company so far?

The demonetization, in fact, had a positive effect on us. In the month of December 2016, Toyota sold 12,747 units in the domestic market, making it the highest sale in December in the last five years. In November, though there was a dip in enquiries and bookings, its back to normal now. The best part is that the rupee has gained strength after demonetization, which surely helps in the business.

Many cheaper cars are making a dent in Innova's numbers. Do you think the high price point at which Innova is being sold is the cause of trouble?

There may be several cars in the competition. But then, Innova comes out as most economical when you consider the usage cost of the lifetime of the car. It comes out to be the cheapest.

What is happening on the export front?

Our exports due to the staleness of products have in fact gone down. The numbers have gone down to 13,300 in past over 12 months as compared to around 20,000 in the preceding period.

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