Home NEWS Union Budget 2019: Here’s what industry expects - ET Auto

Union Budget 2019: Here’s what industry expects – ET Auto

New Delhi: With the sales slowdown conundrum, industry leaders have their eyes set on the upcoming Union Budget to be announced this week, as the government has a tough task to meet the demands of the industry.

From GST reduction on vehicles to boosting rural areas, automakers have several expectations from this year’s budget. Here are some expectations:

Ashish Harsharaj Kale, President, Federation of Automobile Dealers Associations (FADA)Minoru Kato, CEO and President, Honda Motorcycles and Scooters India
“Motorcycle penetration in rural areas is very low. It has big potential to increase further. So we expect government to boost rural areas.”

“Our main request, among others, is to be considered under MSME on an immediate basis and consider industry status in the near or mid-term to our sector. The other request to revive growth in the auto sector is to announce an attractive incentive policy to encourage scrappage of older vehicles which today are the main contributors to vehicular pollution and road safety concerns. A successful Implementation of the Voluntary Policy will further pave the way for a mandatory scrappage policy in the future.”

Rahul Sharma, Founder, Revolt IntelliCorp
“As a new entrant to the market, we need the government to review the current taxation framework and simplify the inverted GST structure as the input on raw material is at 18% wherein the output is at 12%. This will lead to significant working capital blockage. The proposed reduction of the GST on EVs to 5% will be beneficial if implemented.”

“We expect the government to assess and reduce import duties on lithium-ion cells to further improve the industry’s cost issues at least in a phased manner for the next 5 years till we are self-reliant in building the critical components of an EV here in India.”

Tarun Mehta, Co-Founder, Ather Energy
“We expect the budget this year to focus on the 4 areas of concern, that will have an impact across the short to long term growth of the electric vehicle industry in India. There is an inherent inverted duty structure as the GST input on raw material and other overheads are on average of 18 % wherein the output is pegged at 12%. The proposed reduction of the GST on EVs to 5% will increase this delta.”

N Naga Satyam, Executive Director, Olectra Greentech
“We expect the government to include Electric Vehicles in Priority lending sector so that the prospective buyers can be encouraged to move towards this environment friendly transport option. The financial assistance will help in compensating the cost difference of the EVs making it more attractive for the buyers.”

Manohar Bhat, Vice President and Head of Sales & Marketing, Kia Motor India

“We are looking forward to the upcoming budget as the industry urgently needs a push amid the slowdown. As put forward by SIAM, we are hopeful of a reduction in GST from the government to counter the slowdown and elevate the sentiments of potential car buyers. Further, new policies and schemes with regards to electric mobility vision and new incentive-based scrappage policy of old vehicles will also act as a catalyst to restore the growth in the automobile industry.”

Sergi Canovas, Managing Director of Ducati India
“Currently, the auto industry is going through a slowdown brought by a combination of factors such as rising fuel prices, muted consumer sentiment, the transition from BS IV to BS VI emission norms, increased insurance costs, etc. The transition to BS VI is already a point of debate and poses a challenge for the automobile industry, so we expect a relief on policies which will make the transition from BS IV to BS VI easier for manufacturers.”

“Another major expectation from the government is the reduction in GST as this cut would offset the hike in costs for luxury products and serve as a growth catalyst for the whole industry. We have witnessed a growth in demand of premium products, and this would help more consumers to make a move and switch to premium products without hesitating.”

Rajeev Kapur, Managing Director, Steelbird Helmets
“GST shall not be levied on helmets as they are meant for safety. Helmets are life saving devices just like medicines. Therefore, just the way there is no GST on medicines so shall helmets be exempted. Moreover, unless helmets are exempted from taxes, prices will go up and the efforts of the government to roll out the new ISI standard and mandatory use of ISI helmets will be defeated.”

Harish Sheth, CMD, Setco Automotive
“As the MHCV & farm industry has witnessed hard time recently, for MHCV it would be in the best interest for the government to pull forward the implementation of the vehicle scrappage policy over 10 years in age. This will immediately spur growth and improve logistic efficiencies due to advanced technology. Over and above, bringing more liquidity into financial services is critical for further spurring all around growth.”

“From a farm sector standpoint, we need strong reforms to ensure sustainable growth such as easier credit and insurance; relook at the land ceiling act. We are hoping the budget would start stimulating growth now that the elections are over and a stable government with a good mandate is in place. Lastly, irrigation and groundwater management need to be audited and implemented with a standard operating process to avoid leakages and cause overall harm to the farm sector thus affecting the industry.”

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