New Delhi: Expressing concern over sluggish growth experienced by the automobile industry, government said on 5 September it will intervene if need be to sustain the growth and will incentivize exports.
“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,” Minister of Heavy Industries and Public Enterprises Santosh Mohan Dev said at the SIAM Annual Convention here.
“We have written to the finance ministry for further excise deduction,” he added.
Dev said during the first four months, the passenger car segment grew by 13.03%, while the commercial vehicle segment grew by 2.06%. The two-wheeler segment has actually decelerated while the performance of three-wheeler segment has also not been encouraging.
“We are told that among various sectors, the availability of credit facility for the first time buyer is a major constraint coupled with the increase in interest rates,” Dev said.
He, however, said some segment growth has been powered by launch of new models and new vehicles and suggested manufacturers in other segments to follow the same example in addition to work out strategies for reaching new markets.
“If there is not enough demand in the domestic market, then please export,” he said, adding that the government emphasis would be on export and would incentivize it to make India a global hub.
“Like Germany, we will seek a minimum amount on volume of exports, over which there will be reduction in taxes,” he stated.
Commenting on the Automotive Mission Plan (AMP) released earlier this year, Dev said the government was in the process of finalising the implementation committee.
“As compared to last year’s announcement of investment of Rs11,000 crore, the figure as per the latest available information is over Rs 64,000 crore and I am told more announcement are under way. Yet many of these investment are perhaps at the sub-optimum scale,“ he added.
“The AMP has been placed before the parliamentary standing committee and various stake holders, including SIAM, have interacted with the committee,” he said, adding that the government hoped that the report of the committee would further facilitate implementation of the mission plan.
Urging the automobile manufacturer to undertake more investments, he said: “While the government would not like to set a minimum investment limit like China, industry needs to be pro-active to think in terms of world class quality and global scale.”