'Indian auto sector needs policy support to realise potential'

Slowdown in major global auto markets like China, Europe and Brazil offers India an opportunity to attract foreign investments but it will have to improve infrastructure as well as ease of doing business, and frame a policy to boost the sector, says JD Power.
While the slowdown witnessed in the past couple of years has forced a revision of forecast of reaching 9 million units of passenger vehicles annually by 2020 down to 7 million, the global marketing information firm maintains that India's long term potential is still intact.
"Western Europe and Japan are saturated, China is slowing down, people are pulling out from Russia and there are lot of issues in Brazil. So there is a lot of hope for the global auto industry on India and people are taking renewed interest in India," JD Power & Associates Senior Vice-President (Global Automotive) John Humphrey told PTI.

He said India's low levels of automobile penetration, demographic profile and economic growth potential make the country an attractive destination in the long term.
Humphrey, however, said the "complexities of doing business for a foreign player in India" needs to be resolved to unlock the potential that the country has.
Expressing similar views, JD Power Asia Pacific Executive Director Mohit Arora said: "Another issue that needs to be addressed is the improvement of infrastructure, which is key for the growth of the automotive sector."

Moreover, besides the macro economic policies, there is a need for sector specific initiatives to make the Indian automotive industry flourish, he added.

"The auto sector can play a big role in the Make in India initiative but there are no specific support provided for the sector for companies to invest in India. No enablers have been provided," Arora said.
He said that due to the slowdown in the past couple of years, the Indian passenger vehicles market would not touch the projected 9 million units annually by 2020.
"It is expected to be around 7 million units," he added.
According to Society of Indian Automobile Manufacturers, sales of passenger vehicles, which includes cars, utility vehicles and vans, stood at 25,03,685 units in 2013-14, down 6.05 per cent from 26,65,015 units in 2012-13.