AUTOMOTIVE INDUSTRY GETS A BIG BOOST

The budget seeks to lay the foundation to steer the economy over the next 25 years. It lays out four wide-reaching priority areas covering infrastructure, inclusivity, productivity and investment.

- Rahul Kamat

In line with expectations, the automobile sector, especially commercial vehicles (CV) would continue to reap the benefits of the Government’s continued thrust on infrastructure development and capital expenditure across sectors. The government’s Gati Shakti programme, encompassing thrust on seven different engines of growth including roads, railways, and multi-modal logistics infrastructure augurs well for the demand for CVs, especially tipper trucks.

Shamsher Dewan, Vice President & Group Head - Corporate Ratings, ICRA Ltd said, “The Government’s effort to mobilise funds through multiple avenues, especially Sovereign Green Bonds besides addressing the inherent bottlenecks to ensure faster execution of infrastructure projects by construction companies will be critical for uplifting the sentiments of the construction equipment segment, including tipper trucks.”

The medium and heavy commercial vehicle (M&HCV) truck segment, which has witnessed sharp demand contraction over the past two years, will get support from the increased allocation towards the infrastructure sector. Further, the Government’s focus on climate change and clean mobility through plans to introduce battery swapping policy and standardization of charging infrastructure norms also augur well towards enhancing the penetration of electric buses in key cities.