Target for Automotive Mission Plan 2016 to Fall Short by 25%

Published Date : Sep 15, 2014

India is likely to miss the ambitious target it had set for Automotive Mission Plan (AMP) 2016 as the country suffered an economic slowdown in the last three years. The lingering effect of the economic downturn will hit the target with a negative 25%. 

The target was set at $145 billion for AMP 2006-2016 with special focus on export of small cars, two and three wheelers, auto components, and MUVs. The review of AMP 2006-2016 shows, growth rate so far will not be enough to meet the target as decided earlier. It is expected to fall short by a 20%-25%. This review has been conducted by ACMA and SIAM\'s knowledge partner ICRA Management Consulting Services (IMaCS).  

The analysts further reported that sluggish macro-economic factors in the past three years that caused the economic slowdown affected the Indian automobile sector the most. The review further stated that this shortfall can be compensated by 13% to 17% if the government encourages demand with a few interventions.

These interventions include continuation of present excise duty rate on two-wheelers, cars, commercial vehicles, but lowering the excise duty on key components. Additionally, it also highlighted the need for fleet modernization scheme, ban of overloading and its strict enforcement, and expediting the roll out of next phase of JNNURM to achieve the AMP 2016 target. 

One of the goals of the AMP 2006-2016 was to make India the hub for design and manufacturing of automobiles and auto components. The output level was aimed at $145 billion which is more than 10% of GDP, resulting in additional employment of 20 million people by 2016.