While speaking at the 62nd annual session of the Society of Indian Automobile Manufacturers (SIAM), Union Minister of Road Transport and Highways, Nitin Gadkari on Thursday asked automobile manufacturers to focus on quality over cost.
While speaking at the 62nd annual session of the Society of Indian Automobile Manufacturers (SIAM), Union Minister of Road Transport and Highways, Nitin Gadkari on Thursday asked automobile manufacturers to focus on quality over cost.
He encouraged the manufacturers to adopt new technologies to reduce the cost of production and strive to provide comfort to customers, reduce imports and increase exports.
"I tell my friends in the automobile sector that you should be quality centric, not cost centric. because choices of people are changing," said Gadkari, who is known for his frank views.
Recently, road safety in India garnered global attention after the tragic death of Cyrus Mistry in a road accident. The former Tata Sons Chairman Cyrus Mistry was killed in a road accident after his car hit a divider in Maharashtra's Palghar district. The accident has again erupted the debate around the natural tendency of Indians to give priority to the cost and comforts of the vehicle over safety.
Government working to relax GST on vehicle purchase against scrapping of old ones
To lure automobile customers for buying new vehicles, the government is working to make changes in the vehicle scrappage policy. Referring to the issue, Nitin Gadkari said that the transport and steel ministries will again urge the finance ministry to consider the reduction in Goods and Services Tax (GST) on vehicle purchase.
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"Yesterday, I had a meeting with Steel Minister Jyotiraditya Scindia. Again both of us are going to meet the finance minister and request her to give GST concession for new purchase of vehicles against scrapping of old ones," said Nitin Gadkari said, adding that it can be a win-win situation for all.
To make automobile purchases more lucrative for the customer, the minister urged the automobile manufacturers to offer discounts to people for new purchases of vehicles against scrapping old ones.
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"I don't want to make it mandatory...Is it possible for automobile manufacturers to offer some discounts for the purchase of trucks, four-wheelers, and buses against scrapping old ones. The discounts may be ₹50,000 for trucks and buses, for small vehicles it may be less, then that can be an incentive," he added.
Came into effect in April, 2022, the vehicle scrappage policy provides guidelines for vehicle owners on getting fitness certificates for their vehicles after a particular duration. The policy makes it compulsory for personal vehicle owners to clear fitness tests after 20 years. The duration is reduced to 15 years for commercial vehicle owners.
The high logistic cost bore by Indian manufacturers reduces their competitiveness at a global level. Hence, Nitin Gadkari expressed his confidence that the country's logistic cost will be reduced to 10 per cent of GDP in the next two years from 14 to 16 per cent.
In comparison to the logistic cost in India, other countries have way lesser costs making the automobile manufacturing industry competitive. Logistic cost in China is 8-10 per cent, while it is 10-12 per cent in the case of the European Union, informed Nitin Gadkari. He also admitted that the industry is also facing a semiconductor supply crunch in the current scenario.
Finding scope of Bullet train project on Delhi Mumbai Expressway
The Delhi-Mumbai Expressway will possibly complete in March 2023. Union Minister Nitin Gadkari said that there is space available on the Delhi-Mumbai Expressway for setting up the bullet train project. He also expressed his willingness to consider such a proposal in the future.
"I have 120 meter of width available on the Delhi-Mumbai Expressway. If anyone is interested in investing in a bullet train project, I can offer the land tomorrow morning to him and he can start the work," he said.
Being built as a part of the Bharatmala Pariyojana, the 8-lane Delhi-Mumbai Expressway will cover Delhi, Haryana, Rajasthan, Madhya Pradesh and Gujarat.