The auto industry has slammed the government officials for only paying lip service to the sector and not taking any ‘concrete action’ to reverse the decline in growth over the past few years. Chairman of Maruti Suzuki India RC Bhargava said today, “We have been going through a situation where this industry has been declining over a long period of time…I am afraid words don’t get us very much in the terms of extra sales but you need concrete action to make this happen. High tax structures, additional costs in order to meet new emission and safety norms have led to the increase in the cost of automobiles, making them unaffordable for consumers.”
Speaking at the 61st Annual Convention of Society of Indian Automobile Manufacturers (SIAM), Bhargava said even after the contribution of the auto industry towards India’s growth, cars were considered a luxury that only the rich could afford.
Affordability issue for auto industry manufacturers
“I don’t think the car industry would revive either with internal combustion engines (ICE) or with the CNG, biofuels and such things or electric vehicles (EVs) unless we address the question of affordability of cars for the customer,” he said.
Bhargava added that if the auto industry is to drive the economy and the manufacturing sector, the penetration of cars in India has to move from 25 or 30 per 1,000 people to even 200 per 1,000 which requires millions of cars to be made every year.
Echoing Bhargava’s statement, Venu Srinivasan, Chairman and Managing Director, TVS Motor Company, said a two-wheeler which is “the basic mode of transportation in the country” is being taxed at 28% GST, the highest and at a level equal to that of a luxury product.
He said the Indian automobile industry, which provides direct and indirect employment to around 30 million people, has moved from importing and assembling to designing and making in India with both homegrown firms and MNCs making large investments in design infrastructure.
“At the same time, I would like to say, are we being recognised? Is the automotive industry being recognised for what it has contributed to employment, to revenues and to earning of foreign exchange?,” he asked.
From the government’s side, Amitabh Kant, CEO, Niti Aayog said, “It will be impossible for India to grow at high rates for a long period of time without the automobile sector being the key driver of India’s growth.”
Call to innovate
Speaking on EVs, Kant said India is a centre for compact car manufacturing, but if it does not innovate, make a radical transformation, the country will lose this opportunity to become a leader in EV manufacturing.
“At Niti Aayog, we are taking all measures to boost innovation, efficiency and investments in the automobile sector, especially to bring down the initial upfront cost of EVs to the consumers. I am stressing on EVs because I’m a strong and firm believer that this transition is inevitable,” he added.
Heavy Industries Minister Mahendra Nath Pandey said the government is working on establishing charging infrastructure across the country in order to promote faster adoption of EVs.
“We are looking to promote environment-friendly vehicles. We came up with FAME-I, and after it received a good response, we announced the FAME-II scheme with an enhanced outlay of Rs 10,000 crore,” he said.
The government is keen to establish charging infrastructure as well, and working in a way so that the EVs become a public movement, he added.