Mid-term review of Automotive Mission Plan to trigger sales in Indian auto sector
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The government announced, on 5th September, 2012, that a mid-term review of the Automotive Mission Plan 2006-16 is being conducted. This will help the Indian auto industry in becoming a pivotal point all over the world, primarily covering the designing and manufacturing aspects of automobiles.
According to the plan, the automobile and auto component industry is slated to reach USD 145 billion by the end of 2016. Thusly, it will account for a share of greater than 10 per cent in the Gross Domestic Product (GDP) of India. Praful Patel, Minister of Heavy Industries and Public Enterprises points out, "As per the 12th Five-year plan, the ministry is reviewing target set up under the Automotive Mission Plan (AMP) 2006-16". He refers to AMP as a favourable development for the rise of the Indian auto industry. “The growth has come. Every auto major across the world has recognised India as a place for manufacturing and have set up shops here which I think is a good sign for the Indian economy,” Patel said at the annual convention of the Association of Automotive Component Manufacturers Association of India.
S Sundareshan, Secretary in the Department of Heavy Industry confirms that the mid-term review of AMP is running smoothly and as per expectations. According to the ambitious plan, in addition to the revenue that the industry is expected to generate in the next 5 years, there will be 25 million additional jobs in the auto sector in India by the end of 2016.
However, there are some requirements that have popped up as a result of the review. As of now, the industry needs an investment of the scale of USD 35-40 billion to fulfil the aforementioned demands of the government. Various big players in the international markets like General Motors, Hyundai and Honda have invested largely in the Indian circuit over the last few years realising its immense potential. Further investments are expected from other global companies as well as by domestic frontrunners that have not been fairing well lately due to slow economic growth, rising fuel prices and high interest rates on vehicular loans.
The AMP has proved to be a boon for the Indian automobile industry since its formulation in the year 2006. The production of vehicles has seen a drastic rise over the last 5 years, from 9.7 million units when the plan was conceived to a remarkable 20 million units in the year 2011-12.
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