Excise duty roll back won’t affect auto sector: Shankar Sharma

Do you think auto sales to a large extent have been driven by the stimulus? Do you think therefore there is something to be worried about when excise duty cuts are rolled back?

No, I do not agree at all. I do not think anybody rushes out and buy cars merely because they are cheaper by a few thousand rupees or that they will stop buying cars merely because they are more expensive by like Rs 4000-5000.

By and large two things - or at least one thing - has driven this boom which is that low interest rate would definitely help. That is one very big factor in determining car purchases. So if 10 years back you are paying maybe 17-18%, you are paying in a single digit now. That makes a huge difference.

By and large if you would again see oil prices continue to be subsidized. Oil went from $10 to $150 and that was not really what we were paying at the pump. So that also cushioned us from the negative shock of oil prices going up 10-12-15 times.

It is also largely to do with the fact that the stock market does not affect too many lives in India. Core economy remained quite healthy even during the downturn as evidenced by even let’s say the cement numbers.