Price cut not a solution to demand fall: BajajNovember 18th, 2008 - 4:49 pm ICT by IANS
New Delhi, Nov 18 (IANS) Bajaj Auto Ltd chairman Rahul Bajaj Tuesday said cutting prices was not a solution to the demand slump as banks were still wary of lending to consumers due to liquidity squeeze.Commenting on Finance Minister P. Chidambaram’s suggestion that the industry should slash prices and not production to boost demand, Bajaj said: “How can a consumer buy when there are no lenders? The government should ask the banks to lend to customers if demand has to be boosted.”
“From double digit growth in the past, we are going to see negative growth in the current quarter, and the government needs to take greater measures to ease the liquidity crunch,” he added.
Earlier in the day, Chidambaram said at the India Economic Summit here that the industry should cut down prices of their products and get used to operating on lower margins to stimulate growth.