Impact of Budget 2015-16 on

Automotive Industry
The 2015 -16 budget has had no direct impact on automotive industry at large other than an
announcement in the EV segment.
"However, increasing disposable income in rural areas will improve penetration of passenger
vehicles and two wheelers," says Rajeev Singh, Head of Automotive Sector, KPMG in India.
Singh adds that credit of 8. 5 lakhs to farmers announced in the budget 2015 will indirectly boost
the agricultural equipment and tractors segment. The government is aligning to ensure at least 1
family member will have an economic route to support the family indirectly, this would improve
the sentiments of entry level two wheelers.
Investment in infrastructure will go up by Rs 70,000 crores. Revitalization of PPP model of
infrastructure, development of 1 lakh kilometres of new roads will have an impact on commercial
vehicles which has had a negative growth last year.
Later in the budget, the government proposed allocation of 75 crores towards electric mobility to
move to next level of clean technology. The industry can only be hopeful that this would boost
the consumer confidence. However, lack of EV infrastructure in India will make it difficult for the
segment to move at a fast pace.
The government did not make any big bang announcements but stable investments made
across agriculture, infrastructure, manufacturing, various segments of the society, etc. is
focused towards a steady growth.

The big news out of this years budget is the implementation of GST from April 1, 2016, one of
the auto industrys top demands in our pre-budget coverage. Direct taxation will simplify vehicle
pricing and will see a standardization of prices across the country. The Finance Minister has
called for transformative measures on this front.
A Rs 75 crore investment has been proposed to benefit Electric Vehicles. For the industry to
realize sizeable growth in sales of electric vehicles or better infrastructure like charging stations,

the investment allotted does not seem to be of much impact. It will however benefit the growth
of small bicycle and electric two wheeler makers to increase electric mobility inside closed
campuses.
Road infrastructure gets a boost with a proposal of one lakh kilometers to connect smaller
regions of the country. Car sales in smaller towns should improve as a result but this will depend
on speedy execution of road construction projects. The Government will set Rs 70,000 crore
towards Infrastructure projects.
The Make in India Campaign which is the Governments pet project is yet to reveal its specifics.
Finance Minister Arun Jaitley though states clearly that a boost to the Make in India campaign
will see growth in manufacturing and exports soon from the stagnating levels right now.

Rakesh Srivastava, Sr. VP, Sales & Marketing, Hyundai Motor India Ltd
We welcome Initiatives on ease of doing business, Enhancing the global competitiveness of the
Indian industry, Skill development for creating employment in rural sectors mom, rationalization
of taxes for GST rollout & enhancing social security. will be a marginal increase of basic duties.
The service tax increase is not expected to have much impact on manufacturing, since there is
a facility to offset it.
Arun Malhotra, Managing Director, Nissan Motor India
The industry would have benefited a lot had the excise duty benefits been extended but this
budget has the potential to raise the consumer sentiment which will help the industry grow.
There were concessions given on some identified components for EVs in the past and these
concessions continue for another year; we welcome this move
Sumit Sawhney, Country CEO and Managing Director, Renault Operations in India
Although the budget didnt have much for the automobile sector, we are hopeful for some probusiness policies in the near future to benefit the industry. We hope for ongoing measures and
policies to maintain a healthy balance between interest rates, inflation and arrest the fall of the
rupee, which will benefit the economy.
Arvind Saxena, President and MD, General Motors India
The focus on rural roads, highways, expressways and incentives for electric vehicles are
welcome decisions. Some of the other announcements made by the finance minister on the
direct taxation front are also positive steps. Overall, the budget lays down a blue print for a
stable tax regime that can lead to growth in the economy.

Joe King, Head, Audi India

We welcome the reduction of Corporate Tax as well as focus on infrastructure via various
schemes and investments. However, we expected more of a direct support to the auto industry
which has been contributing, significantly to the GDP.
Chetan Maini, Outgoing CEO, Mahindra Reva (Via Twitter)
Budget puts Electric Vehicles in gear. Look forward to a long term policy to enable India to lead
in this space.
R Ramakrishnan, Senior Vice-President Commercial, Commercial Vehicles at Tata Motors
Limited (via Twitter)
One lakh kilometers of roads good for the Nation and the Commercial Vehicle Industry!
Anders Grundstrmer, Managing Director, Scania India
While the increase in customs duty for commercial vehicles is disappointing, overall the
positives outweigh the negatives. The clear commitment to implement GST by 1st April 2016
which is a game changer, easing of norms to aid flow of technology, flow of capital, and focus on
sustainable development along with a road map of clearly stated goals in terms of 1 Lakh KMs
of roads, doubling the clean energy cess on use of coal and launch of a scheme for faster
adoption are all measures in the right direction.
Onkar S Kanwar, Chairman, Apollo Tyres Ltd
"The additional focus on roads and rail infrastructure along with an increased spend of Rs
70,000 crore will also prove to be beneficial for the economy as well as the tyre industry."