Tyre Asia April/May 2018 119
TReADMARKS
Rajiv Budhraja is
Director General of the
New Delhi-based tyre
industry association,
Automotive Tyre
Manufacturers’
Association (ATMA).The
views expressed here
are personal
Rajiv
BudhrajaClosing the loop
on Infra Story
T
he economic report card of India for the
just concluded financial year (FY 2017-18)
has much to write home about. While India
regaining the mantle of fastest growing
economy in the world was heartening enough, the
icing on the cake has been the performance of Auto
and Road Infra sectors both of which scripted new
sagas during the year.
And what a year it has been? The Auto sector in
India touched new highs as it grew at a robust 14%
during the year. no doubt the year began with
lingering effects of demonetization and in the shadow
of transition from BS III to BS IV emission norms
with further disruption caused by implementation
of Goods & Services Tax (GST), yet almost every
segment in the Auto space has reported positive
growth.
even the segments such as trucks (better known as
Medium & heavy commercial Vehicles, M&hcVs)
which started the year with a huge negative took
rapid strides by the close of the year and marched in
positive territory with over 12% step-up.Light commercial vehicles have been the toast of the
season with a stupendous growth of over 25% in FY
17-18. Despite a good base, Motorcycles charted a
growth of nearly 14% in FY18. Passenger Vehicles
(PVs) continued with sustained growth trajectory and
touched high single digit figure.
India crossed a new milestone as it edged past
Germany as fourth largest market for four wheelers
globally in calendar year 2017. India with sales of 4
million units, stood higher than 3.8 million witnessed
by Germany. The pecking order is now changed to
china followed by US, Japan, India and then Germany.
It is believed if the growth trajectory continues,
India may overtake Japan soon to take the third spot.
Setting new records in Automobile production has
been flavor of the season. Passenger vehicles (PVs)
crossed 4 million mark and Utility vehicles (UVs))
which have been turbo-charging the PVs growth
touched one million in production during the year.
Two-wheeler production breached 23 million mark.What helped drive the growth of Auto sector was of
course a pick up in the economy. Private consumption
expenditure continues to rise. Two consecutive years
of good monsoon resulted in robust rural demand.
Improved financing, new product launches and right
market positioning further helped.If Auto set new benchmarks, Road infrastructure also
witnessed activity at a scale rarely witnessed before.
The horizon for the road sector, especially highways,
is expected to change for good.
construction of national highways in India hit a
record 10,000 km in FY18 as the Indian Government
stepped up the pace of awarding contracts. In the
backdrop of construction of 8231 km in FY17 and
4260 km in FY14 (last year of previous Government),
that shows a significant transition.The total investment in constructing national
highways by both the government and private
investors was about Rs 1.5 lakh crore (over US$20
bn). In FY19, the expenditure on national highways is
likely to exceed Rs 2 lakh crore.
The government focus on road building will continue
to improve connectivity, and enhance overall
competence of the economy. The Government has
fixed the national highways project award target
at 20000 km for FY 2018-19 and the highway
construction is pegged at 16420 km, with per day
construction fixed at 45 km as against last year’s
about 27km per day.It is evident that for growth in Auto and road
infrastructure to be sustainable, Tyre Sector, as a
vital cog in the wheel, needs a policy boost urgently.
It is not for nothing that tyres are known as wheels
of a nation especially in a fast developing country
such as India. notwithstanding a difficult year, the
tyre industry has shown much resilience and has
continued to invest so as to play its well-deserved role
in the India growth story.By consensus, for India to be 5 trillion economy,
manufacturing has to get a fillip. And manufacturing
segments such as tyres hold immense potential if
bottlenecks are removed, raw material availability is
ensured at competitive prices and quality and level
playing field is provided by correcting distortions
such as inverted duty.henry Ford said, “coming together is a beginning;
keeping together is progress; working together is
success”.Tyre industry has all the wherewithal and the will to
work closely with Auto and Road sector for non-stop
march of India’s growth. The proven track record of
the tyre industry against all odds makes it a deserving
candidate for policy boost.