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Auto Industry's View On The Budget 2011
The auto industry is quite happy over the accord between India and the European Union, but the manufacturers within the industry have differing options. The President of SIAM said there would be serious consequences in case the existing import duty is touched with any alterations. On the other hand, the global companies such as Mercedes, BMW and Audi are raising their voice for the reduced tariff card from the government. SIAM is taking the message on the calculation of accumulating 60% duty which accounts for the final 110% including counter-vailing duty, internal levies and VAT.
The association has made representations to the commerce ministry for reducing the import duty which was demanded by EU long back. The cry is that the increase in duty will definitely affect the industry"s prospects, job opportunities as well as the native players. The president of SIAM claimed that it was the government"s duty to protect the local players from the decay in growth on times of global openings. He stressed that there has been no business protection in the country when products from overseas are driven in at lower prices.
Honda, for its part, made a claim for reduction of import duty to promote green technology and hybrid vehicles. The company"s director argued that there was no logic to relate the reduction of excise duty with the hit in sale volume. He said it was always a welcome gesture to increase the duty at the times of competition but he negated the idea of increasing the duty for the high end vehicles. He made it clear that the Indian luxury car market has no local competitors for the overseas products rejecting any sort of hit in the local market. On the other hand, he said, reduction in import duty would help those global companies to import latest technology into India at reduced prices. In the event, he added, the companies might think of indigenous manufacturing of such vehicles. Same sort of views were echoed by the MD of Audi India who wanted the reduced import duty on cars with more than 2000cc. He justified his claim on the basis that the local market has 80-90% vehicles under 2000cc.
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