Budget Reaction

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SIAM

Mr. S. Sandilya, President of the Society of Indian Automobile Manufacturers (SIAM), has welcomed the Union Budget for 2013-14 and has said that in the current economic environment, the Finance Minister has tried to balance the need for growth with fiscal compulsions. The announcement of investment allowance reintroduction is very positive. Focus on infrastructure is also a welcome move which will aid economic growth.

While there are several innovative proposals, the auto industry had expected the Finance Minister to come out with a more specific roadmap for implementation of the goods & services tax (GST). The industry is keenly looking forward to full implementation of GST at the earliest.

Mr. Sandilya has also appreciated the Finance Minister’s gesture of allocating double the funds under the JNNURM Scheme allowing a substantial part of it for purchase of upto 10,000 buses. This is very much needed for revival of the CV sector. He has also accepted the SIAM recommendation to lower excise duty on commercial vehicle chassis from 14 per cent to 13 per cent.

Mr. Sandilya thanked the Finance Minister for accepting various other suggestions of SIAM, and hoped that the Budget will help take the economy back to growth path and improve the performance of the auto industry. The critical thing, however, will be speedy policy implementation.

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ACMA

The Automotive Components Manufacturers’ Association of India (ACMA) has welcomed the thrust given by the Union Budget on sustaining the national economic growth. It has appreciated the Budget focus on infrastructure development, education, skilling, infrastructure development and attracting investments in manufacturing, as also the measures announced for sustaining growth and scaling up of the MSME sector.

Congratulating the Finance Minister, Mr. P. Chidambaram, Mr. Surinder Kanwar, ACMA President, said: “The enhanced allocation of over Rs. 14,000 crores for buses under the JNNURM will also give a boost to this segment and the associated auto component consumption, which has been suffering for sometime now.

Further, shortage of skilled manpower has been an issue of significant concern for the auto component industry. The outlay of Rs. 1,000 crores as incentive for skill development will encourage youth to engage in appropriate vocational training which will benefit the industry.”

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Tata Motors

“Overall the Budget 2013-14 has been balanced.

JNNURM phase 1 has helped modernise public transportation across the country. It has demonstrated that, given modern vehicles, citizens are enthusiastic about adopting them. It has helped display the capability of the industry. Fresh allocations for JNNURM, for buses, will help faster growth in this segment.

The increase in excise duty on SUVs will impact the UV market.”

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Meritor

Mr. N.P. Thimmaiah

Managing Director & CEO, Meritor India

“The bus requirement under JNNURM is a welcome sign though not a surprise, and this can offer some additional business to Meritor”.

 

AIMTC

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Mr. Bal Malkit Singh, President, All India Motor Transport Congress (AIMTC), has said that the road transport fraternity is pained at the callous attitude of the government towards this sector, which is the highest tax payer to the exchequer and the second highest in terms of employment generation, after agriculture. This sector is on the brink of collapse owing to exorbitant rise in operational costs.

The Congress had submitted a detailed pre-Budget memorandum to the Finance Minister seeking immediate reliefs, but of no avail.

The working of this sector is becoming increasingly non-viable owing to multiple taxation, ever-rising corruption among Government departments, and all-out increase in various input costs like diesel, third party insurance and tyres.

Volvo-Akash-pic-1Volvo Buses

Mr. Akash Passey, Sr. Vice-President, Business Region International, Volvo Bus Corporation, Sweden

“The Government’s announcement to significantly enhance the allocation for JnNURM during 2013-14 is a welcome step in the direction to promote & strengthen the concept of public transport. The impact of buses procured under JnNURM – I has been profound and has set the base for the next stage of evolution of public transport in India. Volvo Buses in India has played a key role in Driving Quality of Life in many cities in the country. We are confident that the next stage will further revolutionise public transport and Volvo Buses is ready to address the market demands.”

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Eberspaecher

Mr. K.P. Singh, Director – India, Eberspaecher Suetrak Bus

Climate Control Systems India Pvt. Ltd.

“JNNURM is a welcome step for the bus industry and will help in reviving the segment. In our understanding, part of the procurement budget is also allocated for air-conditioned buses for key cities.

With increasing pollution and heat, more States will go for airconditioned buses. This will also help the State transports undertakings to shift passengers from using personal cars to buses without compromising on the comfort levels.

Eberspaecher Suetrak bus air-conditioning systems has technology advantage with lower life cycle costs. We hope to get a good share of business from bus manufacturers getting orders under this scheme.”

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AIFI

Mr. Babu Rao

President, Association of Indian Forging Industry (AIFI)

“The Budget proposals for 2013-14 do not seem to address the slowdown in the manufacturing sector, more specifically the auto sector on which the forging industry depends to a large extent. The investment allowance of 15 per cent announced by the Finance Minister will help only larger industries with outlays of over Rs. 100 crores. A majority of the members of AIFI who are SMEs will not be able to avail of this. The Finance Minister should reconsider the issue and extend the much-needed stimulus for manufacturing to the entire industry.”

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Scania

Mr. Anders Grundströmer, Managing Director, Scania Commercial Vehicles India

“It is good to note that the duty on commercial vehicles has remained constant, and this we hope will promote sales of commercial vehicles in the country. What will provide further impetus is duty concessions and extension of special duty rebates for electric, hybrid and all vehicles, giving room for alternate and green fuel. This will act as a catalyst for moving towards alternate fuels in the commercial vehicles segment as well. We also see immense scope for India’s transportation sector through the newly-announced JNNURM project for buses and the various corridors that will provide greater connectivity, hence furthering the need for good transportation systems in the country.”

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ZF

Mr. Piyush Munot, India Managing Director, ZF India Pvt. Ltd.

“This is definitely a shot in the arm for the struggling bus and allied industries. The increased fund allocation will bolster sales of major bus manufacturers, who are the key suppliers to State transport corporations, and the cascading effect will also be seen on the allied auto component industry. ZF plans to replicate its global long-standing presence in the bus industry, with leading manufacturers in India, through its fuel-efficient transmissions and axle solutions. This Budget announcement is definitely a positive development and has reinforced our belief in the long-term growth prospects in India.”

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Mr. Shatrughan Kumar, MD, Trans ACNR Solutions Pvt. Ltd.

“Fund allocation of Rs. 14,873 crores for the implementation of the Jawaharlal Nehru National Urban Renewal Mission II will have growth worthy impact on the commercial passenger vehicles segment. We expect that it will be helpful in creating demand for air-conditioned buses as the same are ably generating more revenue in comparison to non air-conditioned buses. Requirement of air-conditioned buses is no more treated as a luxury, it’s expected as a must have requirement to meet commuters’ expectation to ensure comfort on move.

We welcome the announcement of the Finance Minister for allocating special package for JNNURM II.”

Corona-RohitKrishnaParigi-picCorona

Mr. Shridhar Kalmadi, Managing Director, Corona Bus Manufacturers Pvt. Ltd.

“The JNNURM funding will help state transports and municipal corporations to purchase good quality buses, encouraging people to leave their cars at home and take to public transport.

It’s a welcome move and demonstrates the fact that the government is keen on improving infrastructure and easing congestion on our roads.

To us personally we see demand for our city buses picking up. Ahmedabad and Indore have made the decision to acquire our buses. Other corporations have expressed interest too.”

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Jamna Auto

Mr. Madhukar Sharma, Global Head – Aftermarket, Jamna Auto Industries Ltd.

“Rapid urbanization has generated an increase in demand of travel and therefore there has been a sharp increase in the number of private vehicles. However, transport infrastrure development has not kept pace with the increase in travel demand.

With the new Budget package, JNNURM-II would further boost the implementation of bus-based public transport system.

Reduction in the chassis price of trucks would give relief to vehicle manufacturers and would lead to increase in demand for leaf springs for OEMs as well as the aftermarket.”

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Atul Auto

Mr. J.V. Adhia, Vice President – Finance, Atul Auto Ltd., has observed that the Budget is neutral to the auto industry, especially the three-wheeler segment. Infrastructure projects have got a boost with the tax-free bonds. “With the Budget we doubt if the fiscal deficit will really be reduced by 4.8%. A lot of plans introduced by the Finance Minister are similar to last year’s. But overall it is a neutral Budget.”

 

 

 

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AMW

Mr. Anirudh Bhuwalka, Managing Director & CEO, AMW Motors Ltd.

“We welcome the Budget as it is growth oriented. The measure taken by the honorable Finance Minister will help in revival of the HCV industry. Investment in schemes like JNNURM, Tax free Infra Bonds, Constitution of road authority, Increase and revival of road networks, increase in the tax holiday fro power plants and policies to encourage PPP along with Coal India are all the measures taken in the right direction both long and short term besides having a multiplier effects.”

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JCBL

Mr. Rishi Aggarwal, Managing Director, JCBL Ltd.

“This is a very positive move and we happily welcome such initiatives. This will certainly give an impetus to the slowing down commercial vehicle industry. However, I feel we need more support from the Government in terms of rationalizing the tax structure for the body building sector.”

Mr. Takayuki Ishida, Managing Director & CEO, Nissan Motor India, said that the 2013 Budget is a ‘budget in motion’ as it continues to focus on growth in predominantly primary sectors like agriculture, infrastructure and education. This growth will in turn support the growth in other sectors, particularly automobiles.

“We are happy about the Chennai – Bengaluru Industrial Corridor to be developed jointly by the Department of Industrial Policy and Promotion (DIPP) and the Japan International Cooperation Agency (JICA). This industrial corridor will play an important role in terms of logistics infrastructure for companies like ours which are present in the said region”.

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MG Group

Mr. Anil M Kamat, Executive Director, MG Group

“We at the MG Group are extremely enthused about the allocation of Rs. 14.873 crores towards the much-awaited implementation of the JNNURM II scheme.

Apart from being a government monetary policy to boost the Indian economy, mass transportation solutions are clearly a starved need of our country. This JNNURM II scheme will surely improve bus penetration in India which currently stands at below one.

At the MG Group, our customers are the leading names in the Indian automotive industry, such as Mahindra & Mahindra, Ashok Leyland and Volvo Eicher Commercial Vehicles. Hence, we are confident that we will be given a sizeable opportunity to contribute by delivering bus body solutions for the JNNURM scheme. We have been expecting the implementation of this scheme and have therefore geared up with enhanced capacities at our bus plants
to ensure that we are able to deliver good quality volumes of buses for the JNNURM II scheme.”

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Wheels India

Mr. P. Sundararaman, General Manager, Air Suspension Division, Wheels India

“Wheels India is the leading air suspension provider for buses in the country. We had benefitted from the last JnNurm program. We hope to continue to work with our customers and service the JnNurm II as well. This should improve the quality of urban transportation in major cities in our country. The air suspension offered by us allows for a lower floor height for easy entry, in addition, to improving the ride comfort of passengers.”

 

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Ernst & Young

Mr. Vinesh Kriplani, Tax Partner – Automotive Practice, Ernst & Young

“The Budget 2013 proposals have disappointed the auto sector due to the increase in corporate tax surcharge for companies having taxable profits in excess of Rs. 10 crores, a 3% increase in excise duty for certain SUVs and a higher customs duty on high value and big cars by increasing the basic customs duty from 75% to 100%. The saving grace is that the general excise duty rate of 12% has been left untouched”.