This article initially appeared in the February 2020 issue of PowerTALK News.
Source: Business Today Read The Article
PSR Analysis: The Indian Automotive Industry was largely left disappointed with the budget after no direct steps were taken to arrest the decline in automotive sales. Although keeping long term benefits in mind, the budget did introduce measures to boost the rural economy, which in turn will directly benefit the commercial vehicle industry which is an important driver for the economy.
Announcing a huge budget for the construction and infrastructure projects throughout the country for the next five years is sure to boost demand for tippers in the medium and heavy commercial vehicle segment. Long distance haulage trucks as well as last mile delivery light commercial vehicles also stand to benefit from the soon to be announced logistics policy.
Promoting the Make in India campaign, the budget also hiked import duties on completely built, semi knocked down and completely knocked down units of trucks and buses from 25% to 40%, 15% to 25% and 10% to 15%, respectively. These measures will boost the local manufacturing scene, but in the short term the budget failed to bring relief to the ailing sector. Growth still remains at least two quarters away for the automotive sector in India. PSR
Ritvik Kulkarni is a Research Analyst at the India office of Power Systems Research.
