Divide in auto companies after relaxed import norms

NEW DELHI: The government’s decision to allow auto makers to import 2,500 units of vehicles without any homologation (road worthiness certificate) has divided the companies, with industry body Siam objecting to the relaxation, saying it creates “unfair competition for local manufacturers” and is against the spirit of ‘Make in India’.

Sources told TOI that a section of automakers — primarily homegrown companies — are opposed to the measure that enables companies to import vehicles, without having to worry about meeting Indian roadworthiness testing norms.

Certification done at the country of origin will be acceptable, and companies have an option to bring in 2,500 cars, SUVs, two-wheelers on an annual basis after paying the mandated duties.


“Siam has always been cautious of diluting any conditions related to import of completely built units (CBUs) as easy imports of CBUs could potentially become a via media for regular commercial sales of certain categories of vehicles, which would be against the country’s stated priority of ‘Make in India’ and would provide unfair advantage to imports vis-à-vis domestic production,” the auto body’s director-general Vishnu Mathur wrote to the government recently.

But notwithstanding Siam’s objection, many companies — who are also member of the auto body — are supporting the relaxation. Global companies such as Mercedes-Benz, Toyota and Nissan back the measure. They refuse to agree with Siam’s views that domestic manufacturing or technology transfer will be impacted. “It is a welcome move and will save us extra efforts, extra investments and extra time that was spent on homologating some of the vehicles through imports,” Michael Jopp, VP (sales & marketing) at Mercedes India, said.

Asked whether the move will restrict local manufacturing by Mercedes (it has a plant at Chakan in Pune), Jopp said, “Not at all. We cannot sustain our operations here based on just 2,500 vehicles. To be competitive in pricing, there is no other way than local manufacturing.” Toyota said relaxation ensures ease-of-doing business.

It said the measure will allow companies to expand operations “without the traditional strings of compliance complexities”. The company is planning to drive in Alphard minivan people’s maker. “With the current high cost of technology import, it is not viable to develop such high global standards locally, considering cost effectiveness, which is purely volume driven, thus limiting any nation’s technological advancements,” Shekar Viswanathan, vice chairman at Toyota Kirloskar Motor, said.

Hardeep Singh Brar, director (sales and commercial) at Nissan India, said the move will enable the company to expedite the introduction of global SUVs.