The backbone of an excellent car is the perfect mix of technicality, synchronization, and the right spare parts. For any automobile player, it is important to keep in mind the consumer’s demands in terms of styling, comfort, and safety. These demands can be met with the right spare parts at the right time and place.
If not addressed, there are a number of issues that could lead to greater challenges in 2018-19 for the industry.
Custom duty on certain spare parts and accessories of motor vehicles, motorcycles, and motor cars has increased from 7.5% to 15%. There is a 5% duty increase on truck and bus radial tires.
The 10% increase in excise duties, i.e., The 5% increase to 15% on Completely Knocked Down Vehicle Kits (CKD), along with a 5% additional increase to 25% on Completely Built Units (CBU), is reflected in the market price for luxury cars, as many of them are either CKDs or CBUs.
All premium brands on the market are increasing their prices by between 3.5% and 5%.
India is a net auto component importer — 13 billion USD worth of imports compared to 11 billion USD of exports. The increase in customs duty is aimed at promoting the “Make in India” mission. It’s not an easy task. To fill this gap, local industry has turned to the black market.
To make any major change, the Indian industry must be strongly supported to produce spare parts.
Delayed custom clearance
Recent delays in releasing spare parts by the customs office are affecting the timely delivery of products and services to customers. The release time used to be two days, but now it is two weeks. This means a huge delay in operational work and product delivery. This will increase the use of counterfeit products and parts as they are easily obtained.
Fall in demand for jobs and
Due to its strong forward and reverse links with key segments of the economic system, the spare parts market for automobiles will be hit. The price increase will be reflected in the coming months by the drop in demand due to the inflationary state of the economy. This will have an impact on job growth as well since the industry has such a powerful multiplier effect.
Other Staple Challenges
E-commerce businesses source their products from different countries, so a stable exchange rate is essential. Recent fluctuations in the exchange rate and rupee depreciation may add to market woes.
The diversity of India poses a greater challenge to all businesses, including those that deal with auto components. In India, the language and dialects change every 60 km. This makes it difficult to provide services.
The government, however, continues to adhere to traditional macroeconomics, which states that the economy is booming and the slowdown in the job market can be avoided due to the ongoing structural reforms.
According to the Indian government, the Indian automotive industry has a bright future. It is important to protect the most sensitive segments of the industry while creating a manufacturing eco-system rather than trading prosperous perspectives for short-term gains.