Calls for reduction in GST rates for auto spares
Gedov Transmissions India Pvt. Ltd. (GTIPL) is a two-year-old brand supplying automotive components. The Hyderabad-based company was formed in February 2016 and has been steadily growing ever since under the experienced leadership of Mr. S.S. Rao, Managing Director of the company. Though the last 18 months had thrown up a number of challenges including demonetization, BS-III vehicle ban and GST implementation, Gedov has managed to hold on to its growth strategy and remains confident of more positive fortunes in the coming fiscal.
Says Mr. Rao: “We are planning to close 2017-18 with sales of around Rs. 130 lakhs, a growth of over 50 per cent in comparison to 2016-17, which we consider a good sign as far as our business is concerned. Though the GST implementation had drastically hit our business, the market has acknowledged the need for GST, with sales slowly starting to improve since October. As for Gedov, we have improved our presence by reaching a monthly turnover of Rs. 15 lakhs by end of December 2017 and have carried this trend into the new year as well. We are very happy to acknowledge that GST has acted as a major factor for improving our sales and has brought in increased transparency between the manufacturer, buyer, retailer and end customer.”
That said, the company backs the auto industry’s plea for a reduction in GST rates for its products from 28 to 18 per cent with the contention that automotive parts are not luxury items but day-to-day utilities. “The GST council must treat the auto industry like certain other product lines such as tiles wherein it has reduced the GST rates to give a boost to the sector. This in my view would bring more transparency and provide a major boost to the auto industry”, adds Mr. Rao.
Product and network expansion
While GST coupled with the auto industry’s volatility had forced Gedov to postpone the introduction of some of its new products, the company had come out with clutch release and hub bearings and UJ Cross last August and introduced suspension parts this January. Gedov plans to launch engine mountings and bushing kits this April with the hope that they evoke good response from the market, similar to how its bearings and suspension parts were well received.
On the network front, Gedov got into North India in November with new distributors appointed at Kota, Udaipur, Jaipur and Jodhpur in Rajasthan, Indore, Bhopal and Gwalior in Madhya Pradesh, Patna in Bihar, Ranchi in Jharkhand, Ahmadabad and Baroda in Gujarat, Nagpur, Jalgaon, Nasik, Chandrapur, Chikli and Mehkar in Maharashtra. Looking ahead, it plans to strengthen its network further by expanding further in the North and foraying into the Eastern region by 2018-19.
Buoyed by its expanding network and new product introductions, the company is confident of achieving its financial target of Rs. 250 lakhs by 2018-19.