sluggish macro-economic factors during the last three years have led to a
significant slowdown, which is amongst the worst that the Indian automotive
industry has witnessed. This has impacted the pace of growth resulting in
underachievement of some targets envisaged in the Automotive Mission Plan (AMP)
2016, while a few more are on course to be achieved by end of 2016.
on the expected growth rate for the remaining period of AMP 2016, the overall
performance of the industry will be short of the targets by around 20 to 25 per
cent. However, this shortfall can be reduced to around 13 to 17pc if the
government supports demand through a few interventions.
findings were revealed in an exercise undertaken by the Ministry of Heavy
Industries & Public Enterprises, Government of India. The Ministry had
formed an Inter-Ministerial Group and invited ACMA, SIAM, TMA to review the
achievements and determine the areas of deficiencies that need to be addressed
to reach AMP 2016 targets. ACMA and SIAM brought in an independent knowledge
partner IMaCS who has conducted a review of the AMP 2016. The details of the
findings were released at a session during the 54th annual
convention of SIAM in the Capital.
per the Mission Plan 2006 – 2016, India was “To emerge as the destination of
choice in the world for design and manufacture of automobiles and auto components
with output reaching a level of US$ 145 billion accounting for more than 10pc
of the GDP and providing additional employment to 25 million people by 2016.”
per the findings of the review, many interventions as envisaged under AMP 2016
have been implemented but some of the interventions have progressed slowly or
could not be taken up. Further, several new issues have emerged that need
immediate attention of both the government and the industry.
order to spur growth in the auto sector a few interventions on the part of the
government have been suggested like:
Continuation of current excise duty rates for cars, 2Ws, CVs and lowering of
excise duty on key components
Introduction of accelerated depreciation scheme
Quick roll out of next phase of JNNURM
Implementation of fleet modernization scheme
Ban on overloading and strict enforcement of the same
Facilitation of affordable vehicle finance
Support for exports of automobiles through dedicated export promotion schemes
areas on which the industry and government should focus are:
New and alternative vehicle technologies viz. Electric Vehicles, Hybrid,
Hydrogen, Fuel Cells and others
Setting up a technology acquisition fund for acquiring latest technologies and
making it available
the industry for commercial purposes
Regulations pertaining to automotive aftermarket to check spurious parts
Regulatory framework for setting up of independent garages and repair
Scheme for technology upgradation and R&D focused on increasing fuel
efficiency, reducing emissions and improving vehicle safety
the last decade was predominantly driven by domestic demand going forward,
industry is geared up to meet both domestic and global demand. Considering
this, Government of India has started working on the next phase of AMP i.e. AMP
2016-26 so as to address the unfinished agenda of AMP 2016 and target new
initiatives keeping in mind the current and expected market dynamics. This will
enable industry to plan and realise future potential thereby contributing more
to the Indian economy
Indian automotive industry witnessed significant growth during the first half
of AMP 2016 i.e. FY06 to FY11. During this period all vehicle segments registered
a Compound Annual Growth Rate (CAGR) in excess of 10pc. However, from FY11 the slowdown
in global economy coupled with weakness in the fundamental growth drivers has
resulted in decline in growth across vehicle segments except for two wheelers,
which posted a CAGR of 4.6pc. This has resulted in gaps between actual performances
of the industry vis-à-vis targets envisaged under AMP 2016, according to the
recent review undertaken.
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