Budget 2023: Cars, EVs and trucks to get demand boost

Demand for cars and electric vehicles is likely to accelerate, riding on enhanced income tax rebate, monetary allocation for vehicle scrappage policy, and import duty exemption on machines and capital goods for manufacture of lithium-ion cells announced in the budget. A reduction in the highest income tax surcharge will also benefit luxury vehicle sales even as select top-end luxury cars will become costlier, while a 33% jump in allocation for infrastructure projects is set to boost truck sales, industry executives and analysts said.

“The reduction in income tax across various categories will increase propensity among the salaried class to spend,” said Shashank Srivastava, executive director at Maruti Suzuki.

Santosh Iyer, MD and CEO, Mercedes-Benz India, said that while the budget should drive demand, basic custom duty change will make the S-Class Maybach, GLB and EQB dearer. “As we locally manufacture, this will not affect 95% of our portfolio,” he said.

Sudarshan Venu, MD, TVS Motor, said, “Emphasis on increased infrastructure spends and support for lithium-ion battery manufacturing will be a great multiplier for industry.”