Union Budget 2022: Auto Industry Welcomes Government's Initiatives

The Union Budget 2022 presented by the Central Government today has numerous optimistic indicators for the electric vehicle, manufacturing, & logistics sector, which are fundamental to the economy. The announcements made today clearly show the shift towards sustainable development with close collaboration with the private sector. Multiple announcements such as bolstering electric mobility adoption, development of the infrastructure, investment in infrastructure projects, and strengthening the rural economy, all contribute to the automobile industry regaining its lost traction due to the Covid-19 pandemic scare, which resulted in the economic shutdown of the industry. We spoke with a few industry leaders regarding the budget announcement, and here's what they think.

Also Read: Union Budget 2022: Key Highlights For The Auto Industry

Rajesh Jejurikar said battery swapping can offer a practical alternative to increase the adoption of electric vehicles.

Rajesh Jejurikar, Executive Director, Auto & Farm Sectors, Mahindra and Mahindra Ltd said, “The roadmap laid out to usher in sustainable mobility by the Honourable Finance Minister in the Union Budget 2022-23 will bolster the electric mobility adoption in India. Battery swapping can offer a practical alternative to increase the adoption of electric vehicles. As part of our Last Mile Mobility, we look forward to working with the Government, policymakers, and our partners to formulate and implement the battery swapping policy. This will include introducing interoperability standards as well as driving innovation in Battery as a Service business model.”

Venkatram Mamillapalle, Country CEO & MD, Renault India said, “We welcome the Union Budget 2022, which spells seamless growth for the Auto & Auto Ancillary industry in India. The government's focus on ‘Aatmanirbharta' will continue to provide impetus to build domestic capacities and push the agenda of ‘Vocal for Local'."

Venkatram Mamillapalle said the government's decision of strengthening the rural economy through an MSP payment will help increase disposable income.

He added, "The National Highways network will be expanded by 25,000 km in 2022-23. Better roads will have a certain positive impact on the automotive sector. Finally, the government's decision of strengthening the rural economy through an MSP payment of Rs. 2.73 lakh crore along with other benefits with an objective of aiding the farming sector, will help increase the disposable income, improving the sentiment in rural areas and further improving the demand & aspirations of rural and semi-urban markets of India for personal mobility.”

Also Read: Union Budget 2022: National Highways Network To Be Expanded By 25,000km In 2022-23

A Hyundai Motor India spokesperson said, “Hyundai Motor India welcomes the progressive Union Budget announced today. The government's strong approach towards accelerating infrastructure development, sustainability with digitalization in every sphere of business will give a strong impetus to the overall economy while empowering consumerism in India. The vision for clean mobility creating an electric vehicle ecosystem is a positive indicator for the auto industry and for its large supply chain. The forward-looking budget will lay the modular economic structure for every section of business and society in India.”

P B Balaji said the launch of the well-conceived PM Gati Shakti program for multi-modal transport including 100 cargo terminals and investments in 25000Kms of highways, apart from investments in ports and metros is an excellent development that will help create a world-class transport infrastructure in the country.

P B Balaji, Group CFO, Tata Motors said, “For the Indian automobile sector, which is a significant contributor to the nation's GDP, the budget offers continuity, and also additional opportunities to drive multi-year growth. Specifically, the robust increase in CAPEX by 35.4% to Rs. 7.5 lakh crore and a comprehensive investment plan for infrastructure is a significant growth booster. Additionally, plans to create EV charging infrastructure including national policy for battery swapping which when combined with the already announced Automotive PLI scheme, furthers the agenda for green mobility.”

Also Read: Union Budget 2022: Finance Minister Proposes Battery Swapping Policy For EVs

Vinkesh Gulati, Director, FADA believes an additional duty of rupees 2/ litre on unblended fuel from October 2022, could play a spoilsport for the already stressed 2W industry.

Vinkesh Gulati – President FADA said, “FADA welcomes and supports the Government's efforts & initiatives towards Electric Mobility. There is a clear emphasis on creative, sustainable & innovative business models. Battery Swapping & Energy as a Service (EAAS) will surely help accelerate the transition towards Clean Mobility. Rural India has generally been the key driver for the entry-level passenger vehicle segment & 2wheeler space. With government plans on 2.3 lakh crore direct payment as MSP to farmers, it will work as a booster for 2Wheeler, Tractor & entry-level PV sector sales. However, an additional duty of rupees 2/ litre on unblended fuel from October 2022, could play a spoilsport for the already stressed 2W industry.”

Raghupati Singhania said the announcement of a battery swapping policy and push for cleantech and electric vehicles will help fasten the evolution of the EV segment in India.

Raghupati Singhania, Chairman & MD, JK Tyre & Industries Limited said, “The expansion of highways network will have a positive impact on the automotive sector. In addition, the announcement of a battery swapping policy and push for cleantech and electric vehicles will help fasten the evolution of the EV segment in India. Further, support for new tech development in various areas of the electronic sector will go a long way in decreasing the dependence on imported tech and help domestic firms overcome the global supply-chain and geopolitical issues”

Martin Schwenk, MD & CEO, Mercedes-Benz India

Martin Schwenk, MD & CEO, Mercedes-Benz India said, “This Budget is overall growth-oriented with a clear focus on digitization, electrification, infrastructure development and ease of doing business; aiming to propel a long-term growth of the Indian economy. The battery-swapping announcement is in the right direction and will be helpful to a limited segment. We however need a broader holistic view on the strategy around developing electric mobility for the passenger vehicle segment. A mid-to long term planning for demand creation is needed and we hope the fine prints will have a ripple effect and passively stimulate growth for the auto industry.”

Sandeep Kalia, Valvoline Cummins Private Limited said, "With the budget announcement completed, we can see the emphasis on this year's budget on wider adoption of Electric Vehicles for the public as well as private use. While there are no immediate implications for the commercial automobile industry, the budget surely helps boost the EV segment that will help redefine the automobile industry in the medium to long run. With battery swapping being at the core, this year the aim is to increase EV battery production and development which will provide incentives to the private sector. This will help the auto lubricant industry in India to enter the EV markets as adoption and infrastructure will improve leading to more EVs on the road."