Auto Bytes - October 2019

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Auto Track Q1 2019

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Auto Track: Volume 1 FY 2020

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The automobile industry is currently at a critical position. It is a challenge especially for the original equipment manufacturers (OEMs), as the market sees multiple new technological innovations and shifts in both vehicles and fuel.

  • The functioning of the automobile industry has changed substantially from FY 18
  • Newer technologies of hybrid, CNG, bio-fuel, electric, autonomous cars, fuel cell and new battery chemistry are being developed and adopted.

Dynamic Indian automakers

Indian automakers have remained dynamic with concurrent shifts in the industry and embraced changes with a forward-looking approach. Leaders in the auto industry have also asked the government to provide a clear and stable policy framework, saying it should not “become a crisis for the industry” whenever there is a regulatory change. Shifts to new technologies must benefit companies and help them secure higher realisations per unit and better margins with the support of the Indian government.

Present scenario

In the present scenario, as Original Equipment Manufacturers (OEMs) sell both conventional and EVs in tandem, it is going to create a significant impact on the automotive ecosystem. Virtually all reusability between existing models and new models is gone, and a complete disruption of the industry economics is on the cards. New supply-chain partnerships are the need of the hour, and industry suppliers are ready to redefine their entire product portfolios in order to retain their position in the changing automotive landscape. Some OEMs already have and others are ready to invest billions to stay relevant in this new normal.

EV ecosystem - Greener fuel economy

Boost to EVs

  • Approved outlay of INR 10,000 crore for three years - Phase II of Faster Adoption and Manufacturing of (Hybrid&) Electric Vehicles (FAME) scheme
  • Upfront incentive on purchase and charging infrastructure
  • Additional income tax deduction of INR 1.5 lakh on interest paid on EV loans
  • Customs duty exempted on certain parts of EVs