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Indian Automotive industry predicted to reach $300 billion by 2026, create 65 million more jobs
The automotive sector is expected to generate up to $300 billion in annual revenue by 2026, contributing over 12% to the nation’s gross domestic product and creating 65 million more jobs
Chanchal Pal Chauhan&Nabeel A Khan | 02 September 2015, 11:57 PM IST
NEW DELHI: The automotive sector is expected to generate up to $300 billion in annual revenue by 2026, contributing over 12% to the nation's gross domestic product and creating 65 million more jobs, shows a document prepared jointly by the industry and government.
The Automotive Mission Plan 2016-26 seeks to make Indian's automotive industry the engine of the 'Make in India' initiative. It was unveiled on Wednesday amid concerns that high taxes and the absence of key reforms like the goods and service tax in a sluggish economy could prove to be major impediments to growth.
Nevertheless, the document projects India's automotive industry to grow to over 70 million units a year by 2026, taking it into the league of China and the US. The AMP is aimed at mapping the progress of the country's automobile industry and setting its goals over the next ten years. Around 23 million vehicles were produced in India in the year ended on March 31, 2015. The market is currently estimated to be worth $74 billion.
READ ALSO: Automotive Mission Plan 2016-26 unveiled: Here are the key highlights
"I think a little too ambitious, if we look at the current infrastructure situation," Rakesh Batra of Ernst & Young said, referring to the targets. He said there was a change of trend, such as people increasingly using cab-hiring apps like Ola, Uber and carpooling. "These will certainly impact the personal vehicle owning trending," he added.
The second Automotive Mission Plan unveiled by the Society of Indian Automotive Manufactures has targets for various segments of the industry, in terms of size and contribution to the economy. The first vision document was for the period 2006-2016
.
"The biggest challenge (to achieve the aim) is going to be of infrastructure. In India, the second biggest cost that we have to bear is in logistics and transportation, which is about 15 percent," said Ravindra Pisharody, executive director, commercial vehicles, at Tata Motors. "However, the projection made is quite achievable."
The second Automotive Mission Plan unveiled by the Society of Indian Automotive Manufactures has targets for various segments of the industry, in terms of size and contribution to the economy '
According to SIAM, the Indian automotive industry has been able to achieve the larger targets of the first edition of the AMP. The key achievements are investments in excess of Rs 1,60,000 crore and creation of jobs, which were targeted at 35 million by the end of 2016. Besides, the industry is on course to hit the base-case target of Rs 5,49,000 crore revenue.
Speaking at SIAM's annual convention in New Delhi, its president, Vikram Kirloskar, highlighted the potential of the industry, but also the risks it is facing. "There are speed breakers in the form of slow government policies with no clear roadmap on GST and high taxes imposed on the auto industry ... the cumulative burden of taxes to customers on cars goes up to 84 percent, making the industry highly uncompetitive," he said.
Others raised concerns over delayed reforms. Mahindra & Mahindra Executive Director Pawan Goenka said political stalemate was pushing several initiatives and this could derail economic recovery.
Hero MotoCorp Chairman Pawan Munjal said: "We hope the government policy frame should improve in tune with time as we move ahead and is move in the right direction in the long-term with key reforms being addressed at the earliest."
To achieve the new targets, the government must deliver on its promises, such as on ease of doing business, said YS Guleria, senior vice president for sales and marketing at Honda Motorcycle and Scooter India.
The automotive sector is expected to generate up to $300 billion in annual revenue by 2026, contributing over 12% to the nation’s gross domestic product and creating 65 million more jobs
Chanchal Pal Chauhan&Nabeel A Khan | 02 September 2015, 11:57 PM IST
NEW DELHI: The automotive sector is expected to generate up to $300 billion in annual revenue by 2026, contributing over 12% to the nation's gross domestic product and creating 65 million more jobs, shows a document prepared jointly by the industry and government.
The Automotive Mission Plan 2016-26 seeks to make Indian's automotive industry the engine of the 'Make in India' initiative. It was unveiled on Wednesday amid concerns that high taxes and the absence of key reforms like the goods and service tax in a sluggish economy could prove to be major impediments to growth.
Nevertheless, the document projects India's automotive industry to grow to over 70 million units a year by 2026, taking it into the league of China and the US. The AMP is aimed at mapping the progress of the country's automobile industry and setting its goals over the next ten years. Around 23 million vehicles were produced in India in the year ended on March 31, 2015. The market is currently estimated to be worth $74 billion.
READ ALSO: Automotive Mission Plan 2016-26 unveiled: Here are the key highlights
"I think a little too ambitious, if we look at the current infrastructure situation," Rakesh Batra of Ernst & Young said, referring to the targets. He said there was a change of trend, such as people increasingly using cab-hiring apps like Ola, Uber and carpooling. "These will certainly impact the personal vehicle owning trending," he added.
The second Automotive Mission Plan unveiled by the Society of Indian Automotive Manufactures has targets for various segments of the industry, in terms of size and contribution to the economy. The first vision document was for the period 2006-2016
.
"The biggest challenge (to achieve the aim) is going to be of infrastructure. In India, the second biggest cost that we have to bear is in logistics and transportation, which is about 15 percent," said Ravindra Pisharody, executive director, commercial vehicles, at Tata Motors. "However, the projection made is quite achievable."
The second Automotive Mission Plan unveiled by the Society of Indian Automotive Manufactures has targets for various segments of the industry, in terms of size and contribution to the economy '
According to SIAM, the Indian automotive industry has been able to achieve the larger targets of the first edition of the AMP. The key achievements are investments in excess of Rs 1,60,000 crore and creation of jobs, which were targeted at 35 million by the end of 2016. Besides, the industry is on course to hit the base-case target of Rs 5,49,000 crore revenue.
Speaking at SIAM's annual convention in New Delhi, its president, Vikram Kirloskar, highlighted the potential of the industry, but also the risks it is facing. "There are speed breakers in the form of slow government policies with no clear roadmap on GST and high taxes imposed on the auto industry ... the cumulative burden of taxes to customers on cars goes up to 84 percent, making the industry highly uncompetitive," he said.
Others raised concerns over delayed reforms. Mahindra & Mahindra Executive Director Pawan Goenka said political stalemate was pushing several initiatives and this could derail economic recovery.
Hero MotoCorp Chairman Pawan Munjal said: "We hope the government policy frame should improve in tune with time as we move ahead and is move in the right direction in the long-term with key reforms being addressed at the earliest."
To achieve the new targets, the government must deliver on its promises, such as on ease of doing business, said YS Guleria, senior vice president for sales and marketing at Honda Motorcycle and Scooter India.
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I didn't see it while opening this one: 
