Automobile industry happy with budget

Mumbai, July 10 (IANS) The government has adopted a balanced approach towards the automobile industry, though without any major policy announcements, prominent players said here Thursday in reaction to the union budget.

PricewaterhouseCoopers partner Abdul Majeed said the excise duty benefits announced in the interim budget have been extended till December 2014 and any further changes would depend on the demand in the automotive sector in the next five months.

"The Goods and Service Tax (GST) is a welcome move and increase thrust on infrastructure development, especially in the northeast and rural areas, is likely to increase vehicle ownership there," Majeed said.

Audi India head Joe King said the announcement of infrastructure growth like developing 100 smart cities and rural roads will benefit the industry in the long term.

AMW Motors Ltd. president A. Ramasubramanian said the measures for infrastructure development like highways, industrial corridors, housing, manufacturing, FDI in defence and power, were welcome and shall contribute to demand generation for commercial vehicles which have seen record lows recently.

"The budget has emphasized thrust on revival of growth in infrastructure and manufacturing sectors. Glad to see the government moving to resolve the mining issues, including iron ore and coal mining bottlenecks.

"With mining activity expected to pick up, we also expect a demand trigger for commercial vehicles which has been seeing negative growth till now," said Shriram Transport Finance Co. managing director Umesh Revankar.

The measures outlined for manufacturing, power, coal and mining sectors should spur economic activity, though a monitoring mechanism should have been introduced for timely implementation of projects in these areas, said General Motors India president and managing director Arvind Saxena.

For the automotive industry, the focus on rural roads, highways and expressways are welcome decisions, Saxena added.

The speeding up of highway projects and development of 8,000 km of roads will boost medium and heavy commercial vehicles as also the proposals for the housing and power sectors, said AMW Motors Ltd. director R.N. Rao.

"Excise concession for the automobile industry are being continued and recent trends in the commercial vehicle sector give us cause for cautious optimism. The recovery of the industry is closely linked to so many infrastructure and consumer sectors that it will be some time before an uptick in demand is continuous and healthy," Rao said.

Nissan India president Kenichiro Yomura said that though there were expectations of bolder reforms for the auto industry, certain aspects like the continuation of excise duty concessions along with reduction in steel prices and elimination of customs duty on auto components bode well for the sector.

"The move towards a GST regime is good, we hope it is implemented at the earliest. The industry really needs a robust and streamlined indirect taxation structure that will lend customers the confidence to spend more owing to the taming of prices. This should have a positive impact on car shopping as well," Yomura said.