Component Suppliers Want Car Makers To Lead The Way In Electric Vehicle Transition
Nitin Gadkari had said petrol and diesel vehicles needed to go off roads in the future.
Gearing up for a transition to electric vehicles, the automotive ancillary industry has sought a definite road map, and wants vehicle manufacturers to lead the way with commitments.
“The component industry always follows the vehicle industry. We cannot make investments,” said Nirmal Minda, president, Automotive Component Manufacturers Association. “Some bigger guys can take that risk, but we are mainly small and medium enterprises. We can’t take a risk without a clear road map,” he said on the sidelines of the annual industry convention in New Delhi on Friday.
The government has shown its intent. To boost adoption of electric vehicles, it has taxed them at 12 percent under the Goods and Services Tax. That compares with a minimum 43 percent levy on the rest of the vehicles.
Road transport, highways and shipping minister Nitin Gadkari on Thursday gave a stern message to the automobile industry to comply with the government’s plan to mover to cleaner fuel, or be “bulldozed.”
Speaking at the automobile convention, Gadkari had said petrol and diesel vehicles needed to go off roads in the future, and that the government was very clear with its intent to move to cleaner transport. It’s working on a policy for electric vehicles, he said.
India's largest passenger vehicle maker Maruti Suzuki India Ltd. said it will support the ancillary industry in the progression to electric vehicles. Maruti Suzuki's parent, Suzuki Motor Corporation, has partnered with Toyota Motor Corporation to develop electric vehicles.
“We have always had a policy of supporting our suppliers. That’s, to a large extent, why the component developed, because of the helping hand we held out,” said RC Bhargava, chairman of Maruti Suzuki.
The industry did see the transition as a difficult one, but was optimistic given the government’s support, said Minda.
The ancillary sector has pumped in large investments to migrate to Bharat Stage-VI emission norms from April 1, 2020, a leap from the current Bharat Stage-IV norms.
Some component manufacturers agreed that the shift to a more stringent emission standards was the bigger challenge at hand, and that electric vehicles would take time.
“There is a trend globally, and the intent of the government of India is also to rampantly adopt electrification. I think there is still a lot of work to be done; it needs to happen in a phased manner,” said Deepak Jain, managing director of Lumax Industries Ltd.