Indian Commercial Vehicle sector to be organised: Frost & Sullivan suggests

Saturday 29 September 2012, 10:43 AM by

As per Frost & Sullivan, new policies for road transportation will bring a order in the Indian Commercial Vehicle (CV) segment. The budget decided by Government of India in fiscal 2011 was pinned with some heavy investments directed towards the Indian infrastructure segment, which brought a ray of happiness in the CV industry. Addressing the burning need for eco-friendly initiatives, the central government made it a mandate in the registration process of CVs in metropolitans to use Compressed Natural Gas (CNG).

The CV market in India is expanding at a fast rate with the emerging global emission regulation trends, which is expected to transform into industry leading products following the implementation of automatic gearbox and Euro V standards by the end of 2015. Also, fiscal policies stating Goods and Services Tax (GST) throughout the country are likely to come into effect soon. The move will facilitate a reliable single tax system, applied on the traverse of goods across the country and will also result in effectiveness of the supply chain.

An analyst with Frost & Sullivan said, “By eliminating multiple taxes and quotas at the state entry points, GST is set to integrate state economies and boost overall growth. CV owners can perform rationalization similar to warehousing on distribution and transportation routes, as taxes cease to become a defining factor.”

The government will offer subsidies components equipped in the fuel efficient and green vehicles, which is anticipated to encourage the fleet owners to shift towards efficient vehicles in the future. Besides these regulations, advancements in technology will also play a major role in improving fuel economy of the vehicles and bringing down the pace of environmental degradation.

The analysts further added, “Consequent to the strong economic growth in India, the expanding urban population as a percentage of the total population is expected to be the key driver for public transport and thereby, Cvs.”

Moreover, the foray of international CV makers in the Indian auto market will mainly improve the standards of technological advancements, which will force domestic makers to modify their pre-set their designing patterns and engineering skills, especially the buses. Presently, bus segment is the most disorganised and dominated sector which is mainly dominated by small-scale participants who do not even have adequate inputs to meet the increasing demands. Experts believe that partnerships between public and private segments could improve the scenario up to some extent and transform the public transport options into more efficient, accessible and convenient.

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