Nitin Gadkari asks auto makers to be quality centric, not cost centric

Amid renewed public debate over road safety after the tragic death of Cyrus Mistry, Union Road Transport and Highways minister Nitin Gadkari on Thursday asked automobile manufacturers to be quality centric and not cost centric.

Speaking at the 62nd annual session of the Society of Indian Automobile Manufacturers (SIAM), he said automobile manufacturers must adopt new technology to reduce costs, provide more comfort to customers, reduce imports and increase exports.

"I tell my friends in the automobile sector that you should be quality centric, not cost centric. because choices of people are changing," said Gadkari, who is known for his frank views.

Also Read — Govt plans 3 vehicle scrapping facilities in every district, says Gadkari

Former Tata Sons chairman Cyrus Mistry was killed in a road accident on September 4 after his car hit a divider in Maharashtra's Palghar district.

Referring to the vehicle scrappage policy, Gadkari said transport and steel ministries will again urge the finance ministry to considering reduction in Goods and Services Tax (GST).

"Yesterday, I had a meeting with Steel Minister Jyotiraditya Scindia. Again both of us are going to meet the finance minister and request her to give GST concession for new purchase of vehicles against scrapping of old ones," Gadkari said, adding that it can be a win-win situation for all.

The minister also suggested that automobile manufacturers can offer some discounts to people for new purchases of vehicles against scrapping of old ones. "I don't want to make it mandatory...Is it possible for automobile manufacturers to offer some discounts for purchase of trucks, for four wheelers, buses against scrapping of old ones.

"It ( discounts) may be Rs 50,000 for trucks and buses, for small vehicles it may be less, then that can be an incentive," he said.

The vehicle scrappage policy has come into effect from April 1, 2022.

Announced in the Union Budget 2021-22, the policy provides for fitness tests after 20 years for personal vehicles, while commercial vehicles will require it after the completion of 15 years.

Noting that high logistic cost is making Indian manufacturers uncompetitive, Gadkari said that he is confident that the country's logistic cost will come down to 10 per cent of GDP in the next two years from 14-16 per cent currently.

According to Gadkari, logistic cost in China is 8-10 per cent, while it is 10-12 per cent in the case of the European Union.

The minister admitted that automobile companies are facing shortage of semiconductors.

Gadkari said that on the Delhi-Mumbai Expressway, which is likely to be completed by March 2023, space is available for setting up bullet train project and he would willingly consider such a proposal.

"I have 120 meter of width available on the Delhi-Mumbai Expressway. If anyone is interested in investing in a bullet train project, I can offer the land tomorrow morning to him and he can start the work," he said.

The Delhi-Mumbai Expressway is being built as part of the first phase of the Bharatmala Pariyojana. The 8-lane expressway will cover Delhi, Haryana, Rajasthan, Madhya Pradesh and Gujarat.