The new government has given the ailing Indian automotive industry a much needed hope to come out of one of its worst days. They presented their first budget day before yesterday and let us have a look at how various manufactures and experts responded to it.
- As per SIAM, the budget is a balanced one with focus centre mainly towards infrastructure development and simplifying the taxation policies.
- Rs 14,389 crores have been allocated for development of rural roads and Rs 37,880 crores for urban roads, under the National Highway Authority of India (NHAI) scheme.
- 16 new ports will be developed which will help in exporting and importing components for the automotive industry.
- Initiation of funding (Rs 24 crores) for National Electric Mobility Mission under the Ministry of Heavy Industry has been an interesting development.
- The government is setting up a special body, called as the Export Promotion Mission which will address the issue of embedded tax in the price of export products which hurt our exports.
- JNNURM (Jawaharlal Nehru National Urban Renewal Mission) has been the major driver for increase in sales of commercial vehicles, most importantly buses, but this year saw no increase in its allocation.
Dr Pawan Goenka, Executive Director, Mahindra and Mahindra sees the budget as a very interesting way in which the government wants to run the nation in the next nine months. Even he sees the budget to be centred on infrastructure, manufacturing and rural schemes which will directly as well as indirectly help in boosting the automotive industry. However he did sound disappointed at no incentive announcement for electric vehicles.
Mr Vinay Piparsania, Executive Director, Marketing, Sales and Service, Ford India, also had a similar reaction to the budget and specifically commended the continuation of the central excise benefits for the automotive sector.
Mr Arvind Saxena, President and Managing Director, General Motors India, calls the budget reform oriented but only a reality check would help us gauge how much these reforms help in bringing positive impact to the sector.
Mr Kenichiro Yomura, President Nissan India Operations, also sees a positive impact as well as better buying sentiments however, he specifically mentions that he wanted to see some initiatives towards green vehicles which could have helped them bring their electric and hybrid vehicles to the country.
Mr Vipin Sondhi, MD & CEO, JCB India, believes that the Public Private Partnership (PPP) projects would be beneficial for the sector and help the sector come out from the dark ages!
Mr Joe King, Head, Audi India, welcomed the announcements related to infrastructure growth such as development of 100 smart cities and rural roads development. He also believes that the auto industry will be one of the beneficiaries of increased savings due to direct and indirect tax proposals.
Overall though the biggest concern everyone had was that the government wants to follow the GST regime which is commendable but a more definitve roadmap for the same would have been much helpful. A few manufacturers did showcase their displeasure on no major announcements for electric and hybrid vehicles.
