Hit hard by the ongoing economic slowdown, the automobile industry is pinning hopes on the upcoming Budget to revive fortunes. The industry has demanded more sops for electric vehicle, increased rural spending and more disposable income in the hands of people.
“The auto sector is in bad shape. No auto manufacturer is working in full capacity because of lack of demand. If vehicles are not selling, companies will not invest in expanding their capacities. Unless there is more disposable income in the hands of people, they will keep on suspending their buying decisions,” said Vikram Kirloskar, Toyota Kirloskar Motor vice-chairman and president of industry body CII. The next big challenge for the auto Industry, he said, will be the transition from BS-4 emission norms to BS-6, due in April 1, 2020.
“This is putting pressure on the manufacturers as time is ticking for clearing inventories. Also, vehicle prices will go up further post-April so demand will remain a concern,” Kirloskar said, adding he had already flagged these issues in his pre-Budget meeting with the finance minister.
In the meeting with the FM, the electric vehicle manufacturers have urged the government to provide financial support for electric mobility and bring the much-awaited scrapping policy for old polluting vehicles. However, all carmakers agreed that the only way demand can be lifted is by leaving more money in hands of the people. Meanwhile, Union minister Arjun Ram Meghwal on Monday said his ministry has received a list of demands, including suggestions to cut GST rates, from automobile industry body SIAM and he has forwarded them to the finance minister.
“I have received 3-4 demands from the SIAM. I have sent your suggestions, including the one related to reduction in GST rate, to the finance minister. If you (industry) have any other suggestions please submit those as the Budget consultation process is still going on,” Meghwal said. He added it was important to submit suggestions before the consulting process gets over. “After the ‘halwa ceremony’ — which marks the launch of formal printing of Budget document — nothing more can be added,” he noted.