The 2017 Budget has been announced yesterday. The yearly budget received a mixed reaction from the automotive industry. Some manufacturers embraced the new Budget, whereas some were left wanting for more. Here are some of the reactions the 2017 Union Budget from the automotive sector.
The Society of Indian Automobile Manufacturers (SIAM) welcomed the Budget, stating that it brings a lot of positive growth to the automotive industry. According to SIAM, the new Budget can restore the balance after the demonetisation and bring a revival to the rural market. The increase in infrastructure expenditure, upliftment of MSME component manufacturers due to the reduction of corporate tax, growth in automobile purchase owing to reduced income tax are some of the things to rejoice. SIAM also expressed satisfaction over the allocation of Rs 175 crores for development of the electric & hybrid vehicle program. However, the excise duties on small CVs and recapitalisation of banks for the automotive finance need to be looked into along with the GST implementation.
According to V.S. Parthasarthy, C.F.O of Mahindra group, the focus on ‘Bharat’, youth, and infrastructure are great contents with positive intention of the Budget. The growth of rural and agriculture sector via the Agri loan, and overall rural development would bring sales to its farming division. Mahindra also appreciates the growth objective of the budget with the abolishment of FIBD, inviting foreign manufacturer to do business in India.
Roland Folger, managing director, Mercedes-Benz India, believes that the Budget 2017-18 has laid greater emphasis on rural population, infrastructure development and digital economy. Allocation to transportation, rural and agriculture sectors is hugely positive. Mercedes-Benz hopes that the government will take necessary steps for the growth of the luxury car industry, and help to lower the price of luxury cars with GST implementation as it will recover the momentum the auto and luxury car industry lost in 2016.
Renault India asserts the Budget is well-balanced focusing on reviving infrastructure and rural economy. According to Sumit Sawhney, CEO and MD, Renault India says that the control over fiscal and revenue deficit and the focus on infrastructure and agricultural credit is a boost to the economy. However, Renault states that the Budget misses out on few areas such as – a pro-business policy for automobile manufacturing sector, a better scrappage policy, and GST implementation.
Guillaume Sicard, President, Nissan India Operations commenting on the Budget said, “The Income tax rate cut for individual taxpayers will create a positive sentiment among first-time buyers for entry-level cars. However, there is nothing substantial for R&D for the automotive industry, EV and Hybrid vehicles, which is a dampener. We look forward to the implementation of GST for the automotive sector in the months to come.”
“The Budget measures to incentivise and promote infrastructure augurs well for the economy and the auto sector. The focus on boosting of rural demand is also encouraging. On the other hand, measures to promote green technology would have given customers more options of environment-friendly vehicles.” says Tom von Bonsdorff, managing director, Volvo India, as a view on the Budget.
Oil and lubricant giants are exalting the Budget as well. Hari Prakash M, CEO, GP Petroleums had to say, “With additional investment and enhanced manufacturing activity leading to purchase of more machinery, the need for industrial lubricants will witness a sharp rise. The concept of creating one gigantic oil PSU is an interesting move.”
Ravi Chawla, managing director of Gulf Oil Lubricants India, also expects the budget to benefit the oil industry with an increased requirement in future. The focus on infrastructure and construction-related activities shall and an extended support to agriculture will result in a have a huge demand of vehicles and construction machinery, agriculture equipment, benefitting the lubricant segment.
