Shift to BS 6 will cost more than Rs 1 lakh crore: Auto industry demands single ministry to deal with

The Indian automotive Industry is in a state of flux, between the shift to BS6 and the even more fundamental shift to Electric Cars, the 58th annual SIAM convention revealed the auto industries sentiments on these massive changes

By: | Published: September 6, 2018 10:57 AM

The India Automobile industry is one of the biggest contributors to the growing Indian economy and also responsible for securing lakhs of jobs. However, the absence of long-term road policy roadmap and frequent changes to technical, safety and emission norms has not allowed the auto-industry to grow to its full potential said Abhay Firodia, President, Society of Indian Automobile Manufacturers (SIAM). Speaking at the 58th SIAM Annual Convention in presence of Anant Geete, Minister of Heavy Industry, the industry has once again demanded a stable long-term policy for electric vehicles and hybrid vehicles in India.

The Government of India earlier in 2017 has said that it will not come out with a new policy for Electric vehicles that once again created a lot of chaos within the industry as it was against the government's claim of electrifying mobility in the next decade. Abhay Firodia also the Chairman of Force Motors said that while the auto-industry did grow by 14% in the recently ended financial year, it still did not grow to its full potential. The 28% GST along with 15% cess was in line with the industry's expectation but changing the GST to similar to that of taxes in the pre-GST regime was disappointing. "The average EBITA by auto-companies is about 10% and the taxation in some states is about 70% which is not rational for the automobile industry," said Firodia. He further said ideally it should be around 20%.

While a long-term EV policy will help the industry to plan the required investments to bring in EVs and hybrids, SIAM also believes that it will not be the end of traditional petrol/diesel powered vehicles. By 2030, India is expected to be a 9 million car market and not more than 40% will be electric cars, which still more than double at over 5 million ICE powered cars.

"Transformation from ICE to EVs is not just by putting electric components. We need to build ecosystem and infrastructure" said Abhay FIrodia.

The other big issue as cited by leaders is the need of a single ministry for the OEMs, Component makers and the industry to deal with. Right now, the carmakers, commercial vehicle manufacturers and two-wheelers companies deal with Ministry of Heavy Industry, Ministry of Road Transport, Ministry of Power for EVs and charging infrastructure, Ministry of Finance & GST Council for taxation issues and then government-owned firms like ARAI for certification and NGT for emission norms. This has slowed down implementation of new norms and has kept the industry in a loop of confusion. Abhay Firodia requested NITI Aayog for a single point contact to make the whole process quicker.

Indian automakers along with components makers together will be investing over Rs 1 lakh crore towards the manufacturing of BS-VI compliant vehicles. The shift to BS-VI comes in less than 3.5 years since BS-IV cars were rolled out and is the first time in the world to undergo such a massive shift. Auto-Industry stands united to rollout lesser emission, BS-VI vehicles starting April 2020.

The leaders present at the SIAM Annual convention also lauded and appreciated policy for EVs by various state governments. NITI Aayog said the PM Modi is very keen on States to come up with its own policy and the innovations will come from grand level. The theme of the 58th Annual Convention is ‘Building The Nation, Responsibly & Future of Mobility in India’.

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