Govt. ready to provide incentives to make India a global hub
Emphasis on exports
Auto majors’ big plans
NEW DELHI: Perturbed over the growth slump in the auto sector during the first four months this fiscal, the Central Government on Wednesday announced that it was ready to intervene, if required, through fiscal measures and export incentives to sustain the growth tempo of the industry.
Assuring the industry, while addressing the SIAM annual convention here, Minister of Heavy Industries and Public Enterprises Santosh Mohan Dev said: “In the first four months this year, the performance of the automobile sector has been lower than what we had envisaged... We are keenly watching the outcome in the second quarter. If need be, we will certainly intervene to sustain growth. We have written to the Finance Ministry for further excise deduction.”
During April-July, the passenger car segment, Mr. Dev said, witnessed a growth of 13.03 per cent, while the growth in commercial vehicles was a mere 2.06 per cent. In the two-wheeler segment, there was actually a deceleration in growth, while the performance of the three-wheeler segment was also not encouraging.
Noting that the availability of credit for the first-time buyer was apparently a major constraint coupled with the increase in interest rates, Mr. Dev said, “if there is not enough demand in the domestic market, then please export.”
The Government’s emphasis would be on exports and would provide incentives to make India a global auto hub. “Like Germany, we will seek a minimum amount on volume of exports, over which there will be reduction in taxes,” he said.
In his address, Commerce and Industry Minister describing the domestic auto industry as an infant sector in need of protection and declared that it would be provided a level-playing field in global trade negotiations. “We will ensure that infant sectors in the economy such as the automotive industry are protected. This is our position at the multilateral trade body, WTO, as well,” he said.
On the industry’s apprehensions over regional and free trade agreements resulting in an inverted duty structure, Mr. Kamal Nath said, “Trade agreements would work only if there is a level playing field.”
Meanwhile, if plans being drawn up by various auto companies are any indication, it is clear that competition will hot up in the years ahead for a share of the market. For getting the ‘first mover’s’ advantage, Mahindra and Mahindra declared that it would launch the hybrid version of its sports utility vehicle (SUV) ‘Scorpio’ by next year.
By then, it would also be able to launch its indigenously developed SUV ‘Ingenio’.
Honda Siel, in turn, announced its plans to launch two new models, including ‘Jazz’ hatchback, in India to mark its entry in the small car segment. The company is launching a 1.2-litre powered engine car in the country to avail itself of the excise benefit.
In the commercial vehicles segment, Ashok Leyland said it would start manufacturing buses at its Dubai plant with an initial investment of Rs. 50 crore by February next. The Dubai plant has an initial production capacity of 2,000 buses.