“This will enable auto Industry to be a part of the Global Value Chain with an allocation of Rs 57,000 crores, over the course of next 5 years. We thank the Government of India for echoing its confidence on the Indian Automobile industry, as the industry was eagerly awaiting for this scheme to increase its competitiveness and take the growth of the sector to the next level,” said Kenichi Ayukawa, CEO, Maruti Suzuki India.
Society of Indian Automobile Manufacturers (SIAM) had earlier warned that the slowdown, complicated by the pandemic, will hit fresh investment
and lead to job losses. The scheme would help the industry to turn that around and attract fresh investment.
Foreign automobile companies have contributed to the development of the industry ecosystem leading R&D activities, exports, and new product introductions, and introducing latest technologies into the sector through technology transfer.
For instance a foreign player like Hyundai has led in the exports of passenger vehicles exporting 145,000 units during the period of April-December 2019 and Toyota plans on investing close to Rs 2,000 crore for the development of electric components and technology. Daimler has invested heavily in R&D and has achieved 90 per cent localization of the products it manufactures in India under the Indian brand Bharat Benz.
“Production linked incentives help in localizing manufacturing and promoting greater levels of indigenization from a supply chain standpoint. The announcements will help attract greater investments in the food industry which is a critical driver of employment and will also have a cascading impact on agriculture and allied sectors,” said Anand Ramanathan, partner, Delloite India.
Auto component manufacturers said that the incentives will help the sector to become reduce import and become net-exporter.
“The announcement of the approval of the PLI (Production Linked Incentive) Scheme for the auto & auto component sector is indeed a very welcome step to make the industry ‘Atmanirbhar’ and globally competitive. We are hopeful that the outlay announced will encourage the industry to become net-exporter and help reduce import dependence. We eagerly await the detailed contours of the scheme for the auto and auto component sector,” said Deepak Jain, president of Auto Component Manufacturers Association of India.