India’s automotive industry, which is the world’s fourth largest and globally one of the most competitive, is currently going through a massive transition with the upcoming implementation of stringent emission and crash test regulations. It has embraced a steep slowdown after nearly a decade of high growth. The liquidity crunch with restricted cash availability from Non-Banking Financial Companies (NBFCs) has added to the strenuous scenario. The piled on inventories with the dealers along with low working capital, the transition to green vehicles and the upcoming BS VI applicability have restricted buyer spend.
However, the industry has strong export growth expectations for the near future. In April-June 2019, Indian automakers exported a total of 4,595,000 units, a 14.50% increase, with the highest contribution coming from 2Ws. The Union Budget 2019 too has attempted to provide an impetus to the industry by granting angel tax relief and exemptions to the consumer to resort to EVs to create demand for greener options. The recent decision of the Goods and Services Tax (GST) Council to slash tax rates on EVs and chargers is also being lauded as a strong step towards encouraging the adoption of eco-friendly mobility solutions.
This edition of Auto Track covers the performance of the auto industry during April-June 2019. It discusses the latest regulatory updates and leading stories of the quarter along with the impact of Union Budget 2019 on the industry.