An ever growing need for robust transportation- the auto sector in India is responsible for 50% of the nation’s manufacturing GDP. In spite of the slump in the economy, this sector grew by 14.50%, in April-March 2019 as reported by SIAM.
After the unexpected slowdown in the Indian Auto industry that has affected businesses to a great extent, 2020 is believed to bring a new hope banking on a host of new and upgraded models ready to get launched.
The companies are expecting to come out of the economic crisis and see the past situation coming back. The slump affected every segment from two-wheelers to cars and heavy-duty trucks and is expected to close down with a decline of 13-17% this year as compared to last year.
The sudden drop in sales forced the industry to bring the changes in production plans and also adversely affected the operational hardships for many companies.
To BS-VI from BS-IV
Keeping in mind the area of emission and environmental sustainability, the industry leapfrogged the BS V and has moved from BS-IV to BS Vi emission norms directly by April 2020 within a 3 yrs recorded span.
SIAM president Rajan Wadhera said the last year’s low base along with the new models should support growth in the industry as the Indian economy is expected to revive next year.
He further added the economy is expected to come out of slump from the second quarter of next year and the effects will be visible from the third quarter. Implementation of BS-VI will clear the old inventory which will give some hike to the production and sale.
The high price of vehicles with norms BS-VI
The changes of transition to stricter emission norm to BS-VI from BS-IV and following the norms for the same are making vehicles costlier.
With the advancement in technology, the price of new vehicles with norms BS-VI is expected a rise of 8-10%. This increased percentage is creating fear among the industry of volume loss.
One way to avoid hike is to low down the GST. For this, SIAM has submitted a request to the government to reduce the GST rates for vehicles to 18% from 28% and to introduce an incentive to scrap old vehicles.
If both the above worked, it will be a great help in gearing up of the auto sector.
Hyundai Motor India MD and CEO S S Kim said that the demand would grow in the second quarter as people will take some time to understand BS-VI implementation.
To make sure that no product of BS-IV stock is left after March 31, the companies are making the productions accordingly.
After Hyundai’s Kona, Tata Motor’s Nexon EV and MG Motor’s ZS EV are others set to hit the roads soon.
Auto Expo 2020
Asia’s largest and world’s second-largest show ‘The biennial automotive show’ is round the corner and is planned to be treated as a launching pad of revival after the unprecedented slump which began the last year and is still haunting the sector.
The Auto expo from Feb 5-Feb 12 will give a glimpse of the response of new products that are hitting the market soon.
60 new launches and unveilings of vehicles are expected at the Expo. China’s Great Wall Motor Company and First Automotive Works (FAW) will make their debut along with MG Motors India.
The companies Maruti Suzuki, Hyundai, M&M, Tata Motors and Kia along with Skoda and Volkswagen brands are making a comeback after the 2018 edition.
The Honda, Toyota, Ford, BMW, Audi, Lexus, Volvo and Jaguar Land Rover along two-wheeler majors Hero MotoCorp, Bajaj Auto and TVS Motor Co will not be part of this year’s Auto Expo.
The automotive industry is planning to welcome 2020 with new hopes and positivity forgetting the slowdown times.The things seem difficult as if now but the long term is hopefully better and positive.
