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Budget 2013: The Auto Industry Speaks Up

The 2013 budget has broadly been termed as a disappointment by the auto sector; read what the various leaders in the auto industry have to say about the current budget


Budget 2013: Impact on cars and bikes



With a hike on import duty for high end cars and motorcycles above 800cc, plus a 3 per cent increase in excise duty for SUVs, the 2013 Budget (See: Budget 2013 Report) has not provided the required impetus to the auto industry. The industry had some major expectations from the budget however they have been let down and some segments have to face more fire than others. We have compiled a list of quotes from the industry to let you get a first hand idea of just what each company thinks of the budget.





Joginder Singh, President and Managing Director, Ford India 

“We welcome the focus on infrastructure development, social benefits for inclusive and sustainable growth in the country. The investment allowance to boost the manufacturing sector is a positive move. The automobile industry is a significant contributor to India’s economy and future growth potential. We are disappointed that there is very little in the budget that will help boost consumer confidence and revive growth. It is a missed opportunity to introduce measures that would have revived industrial growth significantly. As we all know the automotive industry has been going through very challenging times, we are disappointed with the increase in the excise duty for SUVs.”


Takayuki Ishida, MD & CEO, Nissan Motor India

“There is no significant or drastic change in the budget this year.  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 including the automobile industry.


We are very happy about the investment allowance of 15% for investments above Rs 100 Cr as a tax incentive.  We stand to benefit from this as we have plans to expand our operations in India.


We are also 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.


The excise hike for SUV will not have a drastic impact; it is most likely to distinguish the price barometer between sedans and SUVs even more clearly than ever before.”


Mr. Michael Perschke, Head, Audi India

“Increase in Custom Duty for imported cars and Excise Duty on SUVs is very surprising. It will severely impact the auto industry and its growth. We will have to seriously evaluate the impact of this hike on our prices and, have no choice other than to pass on the increase to the customer. Overall it will have an adverse impact on automobile industry which is already going through a slowdown and specifically affect demand including that of SUVs.


Currently, the industry is facing pressure from a number of factors like increasing fuel prices, high input costs, persistent inflation, high interest rates; the increase in excise and customs duty will be a dampener. The government should have looked at extending support to auto industry, which has been contributing, significantly to the GDP and could have formed a strategic pillar of industrial development.


We are happy to note that there is a renewed focus on infrastructure especially roads. The proposed regulatory authority on road construction will hopefully fuel better infrastructure and speed up developments.”  


Ashish Chordia, Chairman, Shreyans

"The increase in import duties on CBU's and bikes over 800cc is indeed going to affect the growth of the automobile industry. A move which provided impetus to the industry, already under pressure, was needed. While aspirational products like Ferrari and Ducati may not have an immediate effect on demand, it may slow down the long range plan for India."


by Posted on February 28, 2013 17:00 IST Views: 37536
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