Will the Motor Car Act pressure demand for the auto sector?

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Two activities in the automobile quarter demand our undivided interest: the Society of Indian vehicle Producers (SIAM) numbers for the arena in FY17 and the Motor Motors (Modification) Invoice, 2016, which has been accredited by way of the Lok Sabha and becomes an Act after the Upper House additionally offers it the all-clear. Faced with critical challenges due to demonetization and Ultimate Courtroom’s ruling on BS-three inventory in latest months, is it a boon or a bane for the sector?

Motor Car


At 21.8 million Cars sold in FY17, the auto area recorded 6.eight percent growth in FY17. Will the new Invoice make lifestyles difficult for the industry in FY18?

Prima facie, at the same time as the provisions of the Motor Vehicles (Change) Bill, 2016 seem stringent, it can go a long manner in making the arena transparent, reduce the time taken to very own a Vehicle, make Indian roads safer, and actually propel call for Automobiles in destiny.

At the transparency the front, the Invoice states that using licenses and Vehicle registrations might be connected to an individual’s Aadhaar card details. This flow suggests that on strains just like the developed nations, India is transferring within the route of the ‘one social security variety’ concept, if you want to include all information of a character.

The Bill offers for Aadhaar-based totally verification for furnish of on-line offerings, which include learner’s license. Linking Car registration and using licenses to the cardboard will permit correct tracking of registration of stolen Vehicles and facilitate a continuing switch of Vehicle registration from one state to another. The validity period for using licenses is proposed to be extended too and the minimum academic qualifications for delivery licenses might not be required.

A key subject matter of the Invoice is to make roads safer, besides increasing the compensation for the twist of fate victim’s households by means of up to 10 times. The amendments to the Bill additionally cater to 1/3-birthday celebration insurance with a maximum liability cap of Rs 10 lakh in case of demise in a Vehicle coincidence and Rs 5 lakh if a critical injury is sustained. The said amount, but, will not be the Top restriction, and the aggrieved own family of the victim will nonetheless have an option to withdraw the case or attraction further. The Invoice also provides specific timelines for processing of insurance claims.

In the case of dying in hit-and-run accidents, the Invoice presents for an 8-fold boom in compensation to Rs 2 lakh. It seeks to usher in radical reforms inside the motor Vehicles regulation by slapping a heavy penalty on site visitors violators, protective desirable Samaritans and making Vehicle-makers chargeable for design defects to reduce street injuries. The simple purpose of the Bill is “to keep human lives”, as a whopping five lakh accidents take vicinity each year, claiming around 1.5 lakh lives across us of a.


Stricter consequences were proposed for excessive threat offenses including drunken using, risky riding, and non-adherence to Protection norms by means of drivers (if seat belts and helmets are not worn). If a minor has induced a fatal coincidence, the parents/guardians could be held responsible and subjected to a 3-12 months prison term, in addition to the cancellation of the Automobile’s registration.

Automobile quarter – The Indian Situation!

This case contemplated the India of yester years. Economic reforms and deregulation have converted that scene. the automobile industry has written a brand new inspirational story. It’s miles a tale of interesting multiplicity, exceptional growth, and amusing purchaser enjoys – all inside a few years. India has already become one of the quickest growing car markets in the international. That is a tribute to leaders and executives inside the enterprise and, similarly to policy planners. the car enterprise has the opportunity to head past this remarkable success. It’s miles status On the doorsteps of a quantum leap.

The Indian car industry is going through a technological trade where each company is engaged in converting its techniques and technologies to preserve the aggressive advantage and offer customers with the optimized services and products. Beginning from the two wheelers, trucks, and tractors to the multi-utility Automobiles, industrial Cars, and the posh Automobiles, the Indian car industry has completed terrific achievement inside the latest years.

At the canvas of the Indian economy, automobile enterprise keeps an excessive-flying area. because of its deep frontward and rearward linkages with numerous key segments of the financial system, the car industry has a strong multiplier effect and is capable of being the driver of the Monetary increase. A legitimate transportation device plays an essential function inside u. S . A .’s speedy Monetary and commercial development. The nicely-advanced Indian car enterprise skillfully fulfills this catalytic position via producing a huge type of Vehicles: passenger cars, mild, medium and heavy commercial Cars, multi-application Motors including jeeps, scooters, bikes, mopeds, 3 wheelers, tractors and many others.

The automobile sector is one of the center industries of the Indian financial system, whose prospect is reflective of the Monetary resilience of us of a. Continuous Financial liberalization over time by means of the authorities of India has resulted in making India as one of the top commercial enterprise vacation spots for lots worldwide automotive players. The car quarter in India is growing at around 18 in line with cent according to annum.

“The auto industry is just a multiplier, a driving force for employment, for funding, for technology”
The Indian car industry started its new adventure from 1991 with licensing of the arena and next commencing up for a hundred in step with cent FDI via automatic route. On the grounds that then nearly all the global majors have installation their facilities in India taking the production of Automobile from 2 million in 1991 to 9.7 million in 2006 (almost 7 consistent with a cent of world automobiles production and a couple of.4 in step with a cent of 4 wheeler manufacturing).

The cumulative annual increase charge of production of the automobile enterprise from the yr 2000-2001 to 2005-2006 turned into 17 in line with a cent. The cumulative annual growth price of exports all through the duration 2000-01 to 2005-06 turned into 32.92 in step with a cent. The production of the automotive enterprise is expected to gain a growth rate of over 20 percent in 2006-07 and about 15 in keeping with a cent in 2007-08. The export throughout the same period is expected to develop over 20 in line with a cent.

the auto area has been contributing its proportion to the shining Monetary performance of India within the latest years. With the Indian center magnificence earning higher in line with capita income, extra people are geared up to own private Vehicles along with motors and Two-wheelers. Product movements and manned offerings have boosted the sales of medium and sized industrial Cars for passenger and goods delivery.


Side through Aspect with sparkling Automobile sales growth, the automotive components zone has witnessed huge increase. The home vehicle additives intake has crossed rupees 9000 crores and an export of one-half of the size of this parent.

FDI vacation spot – INDIA

India is the height of the Overseas Direct funding wave. FDI flows into India trebled from $6 billion in 2004-05 to $19 billion in 2006-07 and is anticipated to quadruple to $25 billion in 2007-08. by way of AT Kearney’s FDI Self-belief Index 2006, India is the second maximum attractive FDI vacation spot after China, pushing the use to the 0.33 role. It is normally believed that soon India will capture up with China. This may also appear as China attempts to chill the economy and its protectionism measures which can be eclipsing the middle Country’s splendor. With rising wages and excessive land fees in the gap regions, China may be dropping its part as a low-cost manufacturing hub. India appears to be a natural choice.

Motor Home

India is up-and-coming an enormous manufacturer, mainly of the electrical and electronic system, automobiles and vehicle elements. during 2000-2005 of the total FDI inflow, electrical and electronic (which include laptop software program) and vehicle accounted for thirteen.7 in keeping with the cent and 8.4 in step with cent respectively.

In offerings sectors, the lead players are the USA, Singapore, and the UK. during 2000-2005, the overall investment from these three nations accounted for approximately 40 in line with a cent of the FDI within the offerings sector. In automobiles, the important thing player is Japan. throughout 2000-2005, Japan accounted for about forty-one in line with a cent of the total FDI in the car, surpassing all its competitors by using a large margin.

India’s great domestic market and the massive pool of technically professional manpower had been the magnetism for the Foreign investors. Hitherto, known for knowledge-based industries, India is emerging a powerhouse of conventional production too. The producing region inside the Index for business manufacturing has grown at an annual fee of over nine in line with cent over the last 3 years.

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