aci_september201-1Rough Patches

The Indian automobile industry is travelling through rough patches as the industry faces lot of challenges ahead. The industry is eagerly looking at the implementation of Goods and Service Tax (GST) where the central government is mulling over calling a special session of Parliament in the second week of September to pass the Constitution Amendment Bill, 2015 or the GST Bill. The government is in talks with all political parties to get the requisite 2/3 majority in Rajya Sabha where the NDA is in a minority.

GST is a value added tax that will replace all indirect taxes levied on goods and services by the government, both Central and States, once it is implemented. This will be one of the biggest taxation reforms that will take place in India once the Bill gets officially the green signal to implement. The basic idea is to create a single, cooperative and undivided Indian market to make the economy stronger and powerful.

The other burning issue is from the tyre industry, which is said to be the unnoticed part of the vehicles. The tyre industry is currently going ups and downs as it faces challenges round the corner. The challenges currently faced by the Indian tyre companies are the increase in Chinese imports and decreasing natural rubber price in India. According to industry data, Chinese tyre imports grew 31% to Rs 613 crore by 2014 from Rs 468 crore in 2012-13.

The value of Chinese tyre imports in 2014-15 may have reached Rs 800 crore. This has added pressure on Indian tyre makers despite low prices of natural rubber over the last few months. To protect interest of growers and curb imports that touched record during last fiscal GoI hiked import duty on natural rubber to 25% or Rs 30 per kg, whichever is lower. The hike in import duties has evoked mixed response among various stakeholders.

The rubber growers are expecting the government to take necessary actions to stop the falling natural rubber price. On the other side tyre manufacturers are back struck by cheap Chinese tyres, especially the manufacturers who contributes more to replacement market. To address these issues the government has to take necessary actions to boost the local manufacturers and to taste the success of Make in India campaign in the tyre industry. The September issue of Auto Components India discusses various issues that the tyre industry currently faces. Apart from that we have also covered the Michelin’s Chennai plant in the Shopfloor section where the manufacturing facility along with tyres manufactured there supports the green environment.

Hope you find this issue interesting. Looking forward to your feedback.

Bhargav TS
Executive Editor


Leave a Reply

Your email address will not be published. Required fields are marked *

AlphaOmega Captcha Medica  –  What Do You See?


* Copy This Password *

* Type Or Paste Password Here *