Gulf Oil expects reforms to boost India's auto sector in Budget 2020
Lubes maker Gulf Oil expects the government to announce vehicle scrappage policy and reforms in the Budget -- to be presented on February 1 -- to boost demand in slowdown-hit auto sector.
"We majorly expect some reforms to boost the auto sector as it has seen a significant slowdown. We hope to see measures aimed at increasing liquidity in the hands of consumers (including possible personal income tax benefits) which can stimulate spending in this sector.
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"We hope to see a robust implementation of the auto scrappage policy. We hope the government continues its thrust on infrastructure to strengthen and propel us forward on the path to higher growth once more," Gulf Oil MD Ravi Chawla said.
In 2019, the automobile industry recorded its worst-ever sales decline in two decades, with an unprecedented slowdown hampering vehicle offtake across segments.
As per the data released by Society of Indian Automobile Manufacturers (SIAM) early this month, all vehicle segments reported de-growth last year as low consumer sentiments, weak rural demand and economic slowdown took toll on sales.
Overall wholesale of vehicles during the year across categories, including passenger vehicles, two-wheelers and commercial vehicles, saw a decline of 13.77 per cent in 2019 at 2,30,73,438 units as against 2,67,58,787 units in 2018.
Stating that the long-term outlook for the automotive industry is "very strong" as both demographically and economically, Citroen India senior vice president for sales and marketing, Roland Bouchara said it is well-positioned for growth in coming years.
"We are expecting a pragmatic budget with key focus on providing impetus to manufacturing sector," he added.
The sector will also benefit from the government's strong focus on boosting infrastructure, Bouchara said.
"We hope the government further encourages the automobile industry and lays down long-term roadmap to help the sector plan its investments in new technologies and skill development," Bouchara said.
Tata Technologies believe the government should continue to focus on 'Make in India' in the forthcoming Budget and provide further incentives for investment in manufacturing units, its Chief Financial Officer, J K Gupta said.
"Further, GST rationalisation for automotive products can provide great support to OEMs who have been fighting the continued automobile slowdown, while supporting the transition from BS 4 to BS 6," Gupta stated.