No doubt, India has made progress in building new roads, highways and expressways. Even the supporting infrastructure like airports, ports, railways and power plants exist, but the infrastructure growth has not kept pace with growing demand. So it is a must to recognise that infrastructure is a major driver of growth for auto industry.
If we consider China, it has provided a huge competitive advantage for their industry by focussing on main factor, that is, infrastructure development. This initiative can give a major boost to public policy making and planning that would in turn boost demand in the sector especially commercial vehicles and build efficient public transport models.
Mobility in Smart cities
Till date, India has witnessed a remarkable automotive growth fueled by urban consumers. On the contrary, rural India, home to 70% of the country’s population, accounts for only a fraction of sales. In contrast, China comprises urban majority country. So the moral of the story is that the Government’s vision for economic growth and development in rural India will definitely pave the way for launch of products targeted at this segment.
The rural demand will be unlocked for vehicles and help India realise its true potential.
Labour law reforms
The auto industry faces high incidence of strikes due to outdated labour laws. These were earlier considered as the flash point between automotive companies and their labour force however, reforms could change this scenario in the days ahead.