Volkswagen Group has stated that doing business in India is not easy and that putting restrictions on the imports of critical auto components from China is a retrograde action.
With it plans to invest Rs 8,000 crore in India, the German auto giant, Volkswagen Group has stated that doing business in India is not easy and that putting restrictions on the imports of critical auto components from China is a retrograde action.
As revealed by the auto giant, the country’s domestic competitiveness will be harmed while the prospects in exports will also be hampered by the move to boycott Chinese imports.
“Any knee-jerk reaction can hurt us more… If we want to be an exporter, certain imports such as that of electronics will be required for export competitiveness”, said Gurpratap S Boparai, Managing Director of VW Group’s India business and companies to a media channel.
The auto companies in India certainly need a long-term and well-defined policy from the government, as making any sudden changes to the regulations often leads to various disruptions in the plans of the car manufacturers. Another move that has affected various carmakers is the implementation of BSVI emission norms earlier this year. However, the move to embrace stricter emission norms is something that can't be questioned, especially because of the alarming level of pollution in certain cities of India. It must be mentioned here that in order to curb the menace of pollution from tailpipe emissions, the government has rolled out BSVI emission norms by completely jumping over the BS5 standards.
While the new BS6 norms have been rolled out, the Government has shifted its focus to promote electrified vehicles by introducing an easier tax regime on these products. From that, many automakers, especially who work on conventional petrol, diesel-run cars, feel that the Government’s excessive focus on EVs is unjustified. They think that the Indian market needs time to recover from the heavy investments in the BS6 before switching to the full electrics. That said, we would once again like to mention here that any move to reduce pollution levels shouldn't be viewed with skepticism.
Meanwhile, commenting on the possible restrictions put on the components imports from China, Volkswagen said that it’s not practical and difficult to implement,
“We are a globalized world. Global supply chains are inter-dependent. If we want to be an exporter, we also need to import. You can’t say that I will not open my market to everyone but I want everyone to open their market for me.”
Currently, Volkswagen has some new model launches up its sleeves and plans to expand its operations in India. It has two factories based out in Pune and Aurangabad in India, which locally manufacturers and assembles models from brands like Volkswagen, Skoda and Audi. The company also imports models from luxury brands like Porsche, Lamborghini and Ducati. Meanwhile, a major part of its current product portfolio comprises decade-old models like Polo and Vento, which have increasingly found it tough to keep fresher competition at bay.