India to become automobile manufacturing hub in 5 years; asks EV makers to cut price: union minister

Nitin Gadkari urged the auto industry to cut prices of Electric Vehicles (EVs) for increasing sales.

Union Minister Nitin Gadkari today said that the government is working towards making India a global automobile manufacturing hub in the next five years. Nitin Gadkari added that the government is already making policies to support the industry. Speaking at the virtual ‘Electric Mobility Conference 2020’ the minister further said that the future is very bright and India has the potential to become the largest Electric Vehicle (EV) market in the world as the government continues to push for EV adoption. He also urged the auto industry to cut prices of Electric Vehicles (EVs) for increasing sales.

Nitin Gadkari underlined that the automobile industry would be able to cater to a growing market with higher output as the Indian manufacturers have the capability to make efficient EVs that can not only create more jobs but also provide opportunities for exports. e-Mobility is going to be the future mode of transport with greater efficiency and less impact on the environment. Import of crude oil and air pollution are two major concerns for the country, he added. The Union Minister highlighted that EV makers must decentralize their supply chains and companies need to focus on procuring raw materials and production of battery cells locally on a continued basis.

demand for vehicles was already low in the past two years. Adding to the woes, the coronavirus pandemic further made a strong dent in the sales number. In the first quarter of this fiscal, the share of rural India in automobile retail sales increased on-year, while that of urban regions dropped. The reason was the concentration of the virus in the urban areas in Q1. Nearly 82 per cent of the caseload was in urban regions, bringing a near standstill situation in the economy. At the same time,only around 18% of the cases were present in rural areas.

However, in the second quarter, the pandemic penetrated deeper into the hinterland, and the share of fresh rural cases had doubled to around 38 per cent by September. Thus, the share of rural regions in automobile sales dropped sequentially across segments in the quarter, according to the Crisil report.


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