SIAM Annual Convention 2015

Transcription

1 SIAM Annual Convention 2015 Automotive Mission Plan September 2, 2015 New Delhi A Roadmap for Indian Automotive Industry Automobiles, Tractors and Auto Components

2 Background Agenda Background Vision, objectives and targets Interventions Conclusion

3 Key achievements under AMP Investments under AMP2016 exceeded Rs. 1,60,000 crore 2. Employment likely to generate 35 million jobs over the decade ending Industry revenue - On course to hit base-case target of Rs. 5,49,000 crore by end of FY16 4. India established as a global Small car manufacturing hub 5. India is globally competitive including on quality in several other areas: Commuter two wheelers Low powered tractors Diesel and gasoline engines of small capacity Powertrain and Transmission Auto-components that involve : casting, forging, grinding, machining, and assembly Components/systems that are complex, a high degree of variation; a high engineering and design input 3

4 What are the learnings from AMP ? 1. Implementation of certain measures need the coordinated approach across multiple ministries in the Centre and the States. We possibly need greater institutional coordination 2. AMP should become the guiding document for framing policies impacting the Indian Auto industry over the next decade. Therefore it should comprehensively address all issues pertaining to Auto sector and for all stakeholders so that policies/rules/legislation do not get done as a knee jerk reaction to various stakeholder claims 4

5 Vision, objectives and targets Agenda Background Vision, objectives and targets Interventions Conclusion

6 Vision for AMP 2026 By 2026, the Indian automotive industry will be among the top three of the world in engineering, manufacture and export of vehicles and components, and will encompass safe, efficient and environment friendly conditions for affordable mobility of people and transportation of goods in India comparable with global standards, growing in value to over 12% of India s GDP, and generating an additional 65 million jobs Vision 3/12/65 6

7 Objectives of AMP 2026 are aimed at making Indian Automotive industry the central pillar of Make in India.1 1. Automotive industry to be the engine of Make in India Achieve top-line of Rs. 16,60,000 18,88,000 crore by circa 2026 Increase export intensity to 35-40% Attract investments of Rs. 4,50,000 5,50,000 crore over the next decade 2. Contribute significantly to Skill India Provide incremental employment to 65 million persons Quality of employment a key feature of this industry 3. Focus on promoting Mobility Focus on promoting safe, efficient and comfortable mobility for every person in the society, with an eye on environmental protection through both public and personal transport options 7

8 Objectives of AMP 2026 are aimed at making Indian Automotive industry the central pillar of Make in India.2 4. Promote India as a preferred destination for every segment of the automotive value chain Foster the promotion of Brand India by developing a sophisticated ecosystem of research, design, engineering and manufacturing that is conducive for a variety of players - both mass market and niche seekers 5. Define a Road map for Implementing policies and regulations Emissions: Reduce the lag between India & EU norms from current 6-7 years Harmonisation: Clear roadmap to adhere to 1998 Agreement of UN Global Technical Regulations (WP.29) Fuel Efficiency: Define clear roadmap for all categories of vehicles Road Safety: Reduction in accidents and fatalities as per norms specified in RTSB 8

9 AMP 2026 envisages a 3 3.5x growth in volumes over its tenure Figures in million units Category-wise projections of production Base case Optimistic case Category type FY 2015 FY 2026 FY 2026 Passenger Vehicles Commercial Vehicles Two wheelers Three wheelers Tractors Total

10 Target ~3.5x to 4.0x growth in revenues Figures in Rs. Crore 10

11 Interventions Agenda Background Vision, objectives and targets Interventions Conclusion 1. Emissions 2. Safety 3. I & C and EOL 4. Trade policy 5. Taxation 6. Skill Development 7. Infrastructure

12 Auto fuels and emission norms 1. Glide path for Fuels & Emissions policy for next 10 years to be articulated and implemented 2. BS V to be adopted for new models by 2019 and BS VI to be adopted by 2023 for four wheelers 3. GOI shall coordinate amongst concerned Ministries and States to ensure policy stability in availability, relative pricing, subsidies, and taxes for automotive fuels 4. Efficiency norms for fuel engines to be agreed upon 5. More clarity on continuation of FAME scheme needed to facilitate investments 12

13 Safety standards 1. Vehicle safety a. Roadmap for making Indian vehicles and auto components comply with global standards of safety b. Standards to be adopted and implemented must be relevant to Indian context c. Formulation of appropriate regulations to check proliferation of spurious components 2. Road safety a. Road safety rules to be aligned with Road Transport and Safety Bill 2015 b. Adopt scientific and technology driven measures c. Strict implementation of the ban on overloading d. Conduct regular Safety audits 13

14 Inspection & Certification (I&C) and End of Life (EoL) 1. Implement a coherent and comprehensive I&C regime pan India a. Roadworthiness of vehicle to be determined b. Inspection frequency: PVs once in 2 years; annually for vehicles used in commercial applications c. Have a national footprint under a franchisee or PPP model 1. Implement a comprehensive EoL and vehicle scrapping policy a. To have a national footprint (Acceptable access to scrapping centres) b. Standards for scrapping and EoL to be in conjunction with I&C policy c. Incentives for scrapping vehicles by way of tradable certificates 2. Introduce appropriate Fleet Modernisation Programme as and when necessary 14

15 Trade policy 1. Identify and eliminate any inverted duty structures in the Automotive chain 2. Current measures and tariff levels with respect to import of used / remanufactured vehicles, tractors & components on CBU imports to continue. 3. Promote local manufacturing of high-tech imported items 4. Proactively pursue signing of FTAs with countries that hold potential for automotive exports 5. Government should ensure level playing field for Indian automotive industry as it signs Trade Agreements 6. FTP announced with mid-term course correction mechanism; similar approach to be continued for the remainder period of AMP 15

16 Fiscal and Taxation 1. GST to be implemented on a simple point to point basis 2. Lower level of taxes supporting Mass-market vehicles (small cars, CVs,2Ws and 3Ws) and tractors to be continued 3. Weighted tax deduction for R&D expenditure to be continued 4. Facilitate long term loans for automotive MSMEs 5. Set up a technology acquisition fund to acquire latest technologies 6. Government should consider accelerated depreciation rates for capital equipment manufactured in India 16

17 Skill development 1. Automotive Skill Development council (ASDC) to be the central apex industry body for skill development under the guidance of Government of India 2. ASDC to be strengthened to become an independent Testing and Certifying agency 3. Skill shortage largely witnessed at the level of shop floor, design, quality, sales, service & finance functions 4. More active participation of the industry in terms of regular dialogues with ASDC 5. All trainers and training programme to be accredited by ASDC 17

18 Automotive specific infrastructure 1. Logistics Dedicated facilities at Mundra, Chennai, JNPT/Mumbai ports Flexi deck auto-wagons BCACBM for movement of vehicles 2. Highway ancillaries Setting up Weighbridges Electronic tolling Development of Transport Nagars & Wayside facilities 3. Urban City development plans to make provision for adequate parking facilities Establish sufficient charging stations for electric vehicles 4. IT Backbone Expedite implementation of digital infrastructure (Vaahan, Accident data, ICES, etc.) 5. Establishing Auto Supplier Parks and creation of social infrastructure around automotive hubs 6. Expedite implementation of NATRiP and also focus on areas necessitating establishment of advanced development facilities, simulation tools and evaluation techniques. 18

19 In conclusion.amp 2026 has five core themes 1. Indian Automotive industry will be a top job creator 65 mn jobs 2. Indian Automotive Industry will be the prime mover of Manufacturing sector and Make in India Programme 3. AMP2026 aims to increase exports of vehicles by 5x and Components by 7.5x 4. Success of AMP 2026 requires a coordinated and stable policy regime for Automotive sector 5. Specific interventions needed to sustain and improve manufacturing competitiveness and address environmental and safety challenges 19

20 About IMaCS Thank you For clarifications, please contact:: R Raghuttama Rao Managing Director raghuttama.rao@imacs.in IMaCS is a multi-line management and development consulting firm headquartered in India. We have an established track record of 18 years in consulting and a diversified client base across various sectors and countries. IMaCS has completed over 1700 consulting assignments and has worked in over 45 countries across the globe. IMaCS is a fully-owned subsidiary of ICRA Limited (ICRA), one of India's leading credit rating agencies. It operated as a division of ICRA till March 2005, when it was de-merged from ICRA and became a standalone Company. Our clientele includes multilateral and bilateral agencies, banks & financial institutions, manufacturing and service organisations, Governments, Government-owned organisations, investors, and regulators.