Auto sector in India is facing supply chain issues including rising price of steel, unavailability of semiconductor and higher shipping container charges, noted the Society of Indian Automobile Manufacturers (Siam).
Total production of passenger vehicles, three-wheelers, two-wheelers and quadracycle, was 2.20mn units in January from the previous year, up by 7.67pc, the Indian auto body stated. Production from April 2020-January 2021for passenger vehicles, three-wheelers, two-wheelers and quadricycles was reported at 17mn units, down 21pc from the previous year.
Siam data revealed that domestic sales for passenger vehicles were recorded at 276,554 units in January, up 11.14pc from the year prior; three-wheeler sales fell by 56pc to 26,335 units while two-wheeler sales increased 6.63pc to 1.42mn unit in this period.
Passenger vehicle sales from April-January was down 13.20pc to 2.05mn units. Three-wheeler sales dipped 72pc to 156,936 units from 2019 levels. Two-wheeler sales slipped 20.05pc in April-December 2002 to 12mn compared to a year prior.
Siam’s Budget Reaction
The announcement of major highway projects with sizeable increase in infrastructure outlay will help boost demand for both commercial vehicles and private vehicles. Commercial vehicle sales are struggling. The allocation for procurement of 20,000 buses will also directly benefit the industry, Siam noted.
On Scrappage Policy
Siam hopes that for the vehicle scrappage policy, fitness testing and certification would be carried out much earlier and at frequent intervals to ensure safety, environment friendliness and fuel saving.
On custom Duty Reduction
The reduction in customs duty on some steel grades, and retracting of countervailing duty and anti-dumping duty on certain steel products was welcomed by Siam. The auto body said that since platinum, palladium and rhodium are not available in India and are essential for emission control, their duty could also be removed completely.
The increase in customs duty on auto parts/lithium ion cell parts is a concern and is likely to increase cost of manufacturing automobiles, wherever indigenization is yet to happen, Siam said.