Automobile industry poised for promising growth

The Budget is generally good as there is lot of emphasis on infrastructure development, whether it is rural sector or overall highway development— conversion from state highway to national highway. With infrastructure development and also the proposed amendment to the Motor Vehicles Act, I expect the overall automobile sector will have a positive impact. 

This is expected to generate growth prospects, the demand should go up, at least in a year or two depending upon how it is implemented. It should create more demand.

As far as our expectations and the outcome in the Budget is concerned it is generally alright. The corporate sector expected the removal of exemptions as well as reduction of tax rates. But apparently one part has been done other part is not clear yet, we have wait for more details. 

On infrastructure development, the Finance Minister’s speech covered  general topics. He has covered everything from the rural sector to highways and even the airport. All this will create growth for automobile sector. With the announcement for creating skill development, the availability of manpower will improve. The next generation vehicles need more skilled personnel, at this moment vehicle are developed locally either by apprentices while some companies have their own training institutes. All these can be pooled together and skilled labour may be available in two or three years down the line. More employable people will help the sector. 

For the automotive sector, the Budget is positive. It will generate more demand for the automobile component sector and will follow once the original equipment manufacturer (OEM) grows, automatically the automobile component sector will grow, its more or less growth oriented Budget for the automobile and automobile component sector.