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Run-up to the Budget: Auto Components Industry
Auto components: State of the industry (2000-01)
- During the April-December 2000 period, demand for automobile components is estimated to have increased by around 2.5 per cent, due to an increase in automobile production during the April-June 2000 period. In addition, demand increased from the replacement market, due to an increase in vehicle population in 1999-2000.
- During the 2000-01 period, production of components is expected to increase by around 4 per cent, due to low demand from the domestic automobile industry.
- During the 2000-01 period, exports of components is expected to increase by around 16 per cent, due to an increasing focus on exports.
- During the April-September 2000 period, operating profit margins of the industry remained stable at around 15-17 per cent.
Industry expectations from the Union Budget
- No change in the excise duty: The Automotive Component Manufacturers Association of India (ACMA) has asked for the excise duties on all components to be maintained at the existing levels of 16-24 per cent.
- Increase in the customs duty: ACMA has asked for the customs duty on all components to be raised to the peak or bound rate of 40 per cent.
Auto components: Duty Structure
| (per cent)
|
|
1999-2000 |
|
2000-2001 |
| |
Customs |
Excise |
Customs |
Excise |
| Parts of vehicles |
|
|
|
|
| Parts of 4-wheelers |
40 |
16 |
44.04 |
16 |
| Parts of 2-wheelers |
40 |
16 |
44.04 |
16 |
| Parts of IC engines |
38.5 |
16 |
40 |
44.04 |
| IC engines |
38.5 |
16 |
40 |
44.04 |
| Transmission shafts, gears and gear boxes
|
27.5 |
16 |
32.6 |
16 |
| Auto gaskets/brake linings |
27.5 |
16 |
32.6 |
16 |
| Clutch facings |
40 |
16 |
44.04 |
16 |
| Catalytic convertors |
5.5 |
16 |
9.72 |
16 |
Notes:
1) For 2000-01, customs duty include SACD of 4 per cent, effective since 1999-2000. In 1999-2000, the SACD was applicable only for non-traders, and hence, has not been included in the customs duty.
2) Surcharge of 10 per cent on basic customs duty, levied in 1999-2000 Union Budget, has been included.
3) In the 1999-2000 Union Budget, MODVAT credit was enhanced from 95 per cent of the excise duty paid on inputs, to 100 per cent.
Source: Central Excise and Customs Tariff
Disclaimer: CRISIL has taken due care and caution in compiling this report. Information has been obtained by CRISIL from sources which it considers reliable. However, CRISIL does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. CRISIL is also not responsible for any errors in transmission and especially states that it has no financial liability whatsoever to the subscribers/ users/ transmitters/ distributors of its web site.
Rediff-CRISIL Budget Impact Analysis
Budget 2001
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