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Auto sector could grow to $145 b by 2016: Minister

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Mission plan to make India global hub for automobiles, auto parts

THE MINISTER for Heavy Industries, Mr. Santosh Mohan Dev (right), and Mr Madhur Bajaj, President, SIAM, at the SIAM AGM in the Capital on Thursday. Kamal Narang
THE MINISTER for Heavy Industries, Mr. Santosh Mohan Dev (right), and Mr Madhur Bajaj, President, SIAM, at the SIAM AGM in the Capital on Thursday. Kamal Narang

Our Bureau

The road ahead


Auto sector's

contribution to GDP to rise to over 10 per cent by 2016.

Centre to

support auto companies making fuel-efficient vehicles and those using alternative fuels.

Government to

play a key enabling role in facilitating infrastructure creation.

New Delhi, Sept. 7

The Heavy Industries and Public Enterprises Minister, Mr Santosh Mohan Deb, said on Thursday that annual revenue from the country's automobile sector could grow to $145 billion by the year 2016.

"The rapidly growing domestic demand for vehicles is one of the biggest factors impacting the high growth rate in the industry," Mr Deb said, while addressing the annual conference of the Society of Indian Automobile Manufacturers (SIAM). The Indian automobile sector currently generates revenues of $34 billion a year.

Mr Deb said the contribution of the auto sector to India's gross domestic product is expected to increase to more than 10 per cent by 2016, compared with 3-4 per cent currently. "We have decided that our dialogue with various segments of the auto industry should crystallise into the Automotive Mission Plan 2006-2016 to make India a global hub for automobiles and auto components," Mr Deb said.

Govt support

The Minister said the Centre would support automobile firms manufacturing fuel-efficient vehicles and those using alternative fuels. "The Government will henceforth support those companies which will achieve substantial reduction in energy consumption and at the same time look for use of alternative fuels including hybrids," Mr Deb said.

He said the two major challenges before the auto industry were the development of efficient engines to minimise energy consumption and promoting alternative fuels and hybrid.

Draft plan

"We have crossed the first phase of liberalisation, which was only investment-oriented. Now, we are at the second phase where we will look for investment in innovation and energy security," he said.

Mr Deb also released the draft `Automotive Mission Plan 2006-2016' that aims to make India a global hub for the manufacture of automobiles and auto components. "There is a need for wider public debate on the draft so that the document can be inclusive," he said, adding that the Government would play the role of a facilitator.

"The Government would play a key enabling role in facilitating infrastructure creation... work to attract investments and facilitate research and development," the Minister said.

He said the auto sector should provide additional employment to 25 million people by 2016.

He said work on the National Automotive Testing and R&D Infrastructure Project (NATRIP), coming up at the cost of Rs 1,718 crore, was under way and by 2008 it would provide the industry an excellent infrastructure in testing, homolgation and certification.

"The three centres in Manesar, Chennai and Pune will cater to the three growing hubs of auto industry.

In the second phase of NATRIP we will have nine centres of excellence for R&D in auto industry," Mr Deb said.

(This article was published in the Business Line print edition dated September 8, 2006)
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