The auto industry on Friday said due to the Covid pandemic, it is not ready for new regulations which are planned for 2020-23 as it would require huge investments.

Rajan Wadhera, President, Society of Indian Automobile Manufacturers (SIAM), said the industry has already invested significantly in the transition to BS-VI emission norms and for meeting various new safety regulations.

“For (implementation of) upcoming regulations, investments are very steep and the commensurate revenues have not been realised by the industry due to lack of consumer demand,” he said adding that demand stimulus for the industry is a must in order to achieve targets listed in the Automotive Mission Plan (AMP) - 2026.

AMP 2026 envisages taking the auto industry’s gross domestic product contribution to 12 per cent, from the current seven per cent, and generating 6.5 crore additional jobs from the 3.7-crore jobs now. It also targets to enhance vehicle production to 6.6 crore units by 2026.

“We were almost on course (for the AMP 2026), but in the last two years we have only reached (volume of) 2.6 crore vehicles... we strongly feel that if we want to stay on course on the plan, demand stimulus is required,” Wadhera said at the 60th SIAM annual convention.

“We make a strong plea and request to you that the industry is not in a position to invest in new regulations like corporate average fuel economy (CAFE) norms and Real Driving Emissions (RDE), which are likely to come in the next two years,” Wadhera told the government.

Industry leaders also said that the government needs to provide the required push for consumers to come back to the dealerships, apart from tax incentives (GST reduction).

‘Toughest times’

Kenichi Ayukawa, Managing Director and Chief Executive Officer, Maruti Suzuki India, said: “We are facing one of the toughest times in history. Industry needs your support. We will eagerly wait for the GST reduction and scrappage scheme. We believe that the taxes on the increased turnover will be more than the Government’s expenditure on this scrappage scheme on GST rate reduction.”

Vikram Kirloskar, Past President, SIAM and Vice-Chairman, Toyota Kirloskar Motor, said the impact of the recent pandemic on the industry is unprecedented and it was essential that a long-term stable policy roadmap is created for the sector with phased timelines and minimal revisions.

“Policy interventions and regulations should focus on larger national imperatives and be technology neutral. Given the multitude of technologies and alternative fuel options, a clear National Fuel Roadmap would help the industry in making informed decisions. It is also important that the development of technologies should precede the implementation of regulation,” he said.

Meanwhile, Uday Kotak, President, CII and Managing Director and CEO, Kotak Mahindra Bank, said money is aplenty, banks are ready, willing and eager to extend easy loans and financing options, but, the banking sector needs to make sure that manufacturers do not face any supply side disruptions.

“Owing to the Covid-19 pandemic, we are in a ‘never normal period’ with new opportunities and challenges. As the festival season is approaching, we expect to see an increase in demand. Therefore, it is now imperative for us to ease out the supply chain bottlenecks,” Kotak said.

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