Tata, Suzuki, M&M win auto PLI bids

Tata Motors Ltd, Suzuki Motor Gujarat, Mahindra and Mahindra, Hyundai and Kia India Pvt. Ltd are among 20 automakers chosen to receive production-linked incentives (PLI) as part of the government’s strategy to boost local manufacturing of automobiles and attract more investments in the sector.

The 20 companies have made proposals to invest more than ₹45,000 crore combined.

Mahindra proposed to make the highest investment under the scheme at ₹5,150 crore, followed by Tata Motors at ₹3,000 crore and Ashok Leyland at ₹2,494 crore. The other applicants approved in the four-wheeled vehicle segment include Eicher Motors Ltd, PCA Automobiles India and Pinnacle Mobility Solutions.

Interestingly, Ford India also featured among those approved to make vehicles under the PLI scheme. The company, which announced last September the closure of its car manufacturing operations in India, would look to serve the global market using one of its Indian factories for making electric vehicles. Ford has proposed to invest ₹2,410 crore.

A company spokesperson said: “As Ford leads customers through the global electric-vehicle revolution; we’re exploring the possibility of using a plant in India as an export base for EV manufacturing.”

Tata Motors said it was “delighted with the opportunity to participate in the progressive and transformational auto sector PLI scheme that aims to drive self-sufficiency and world-class competitiveness through the ‘Aatmanirbhar Bharat’ initiative.”

It said it was committed to shaping India’s vehicular landscape with “smart and sustainable mobility solutions powered by new-age technologies to address the evolving needs of both personal and commercial mobility and this opportunity will help us drive this with even greater vigour.”

Under the PLI scheme, the government gives an incentive of up to 18% to encourage manufacturers to make fresh investments in the indigenous supply chain of advanced automotive technology (AAT) products.

The ministry of heavy industries said the scheme has been a huge success in terms of the overwhelming response received with a proposed investment of ₹45,016 crore from the approved applicants.

In the two- and three-wheeler segments, proposals of Bajaj Auto, Hero MotoCorp, Piaggio Vehicles and TVS Motor Co. were approved with proposed investments of ₹1,042 crore, ₹1,222 crore, ₹1,026 crore and ₹1,500 crore, respectively.

Under the category of ‘new non-automotive investor’, the applicants selected were Ola Electric Technologies, Axis Clean Mobility, Booma Innovative Transport Solutions, Elest Pvt. Ltd, Hop Electric Manufacturing Pvt. Ltd and Powerhaul Vehicle Pvt. Ltd. Ola Electric has proposed the highest investment among the new-age players at ₹3,500 crore.

According to the government, the PLI scheme for automobile and auto components worth ₹25,938 crore and PLI for advanced chemistry cell ( ₹18,100 crore), along with FAME Scheme ( ₹10,000 crore), will enable India to leapfrog to environmentally cleaner, sustainable, advanced and more-efficient electric vehicle-based systems.

A total of 115 firms applied for sops. The incentives are applicable for products made in India from 1 April 2022 for a period of five consecutive years. The scheme was open to automakers as well as investors.