The withdrawal of scrappage incentive scheme in several European countries is expected to bring in a cause of concern for the Indian automobile industry. Indian players Maruti Suzuki and Hyundai Motors, two of country’s biggest car exporters, are expected to bear the burnt in overseas sales.
The scrappage scheme provides car owners a subsidy to replace their older, polluting vehicles with low-emission and fuel-efficient ones.
Eleven countries including Germany, France, Italy, Romania, Spain and Portugal have withdrawn the scheme from the last week of July or the first week of August, barring the UK which has decided to continue with the scrappage scheme.
Hyundai Motors India (HMIL) exports nearly half of monthly production of 42,000 to 48,000 units. However, it has secured few orders for the next two months and hence, the removal of scrappage incentive will not affect it harder in coming months.
Maruti, having double exports in the first quarter of this fiscal to 29,314 units over the same quarter last year, maintained that there was no let-up in exports and the demand for its A-Star hatchback has been impressive in Germany, the UK, Netherlands, Spain and France. Experts feel that the removal of incentive scheme is expected to hamper the Indian auto mobile industry in coming months.