While Prime Minister Narendra Modi promised ease of doing business as he launched ‘Make in India’ campaign, the Indian subsidiary of Skoda Auto said it is holding back investments in the country because of some unclear policies.
The company said though the Modi Government has manufacturing vision, much of it is not clear to global investors, especially with recent cases such as the Competition Commission of India (CCI) imposing fine on lot of companies.
“There are issues the business community faces, such as technology transfer agreement. For example, the Fiat case (payment of excise duty on the discounts) and the recent order by the CCI are making global automakers rethink their plans to further invest in India,” Sudhir Rao, Chairman and Managing Director, Skoda Auto India, told reporters here.
He said the psychology of the people overseas is that they have not seen specific solutions and resolutions yet.
“They want India to succeed… everybody wants to invest more in the country. But I also a believe that you can always create an island of excellence within your four walls,” he said.
He said foreign companies are unclear on many issues — whether it is tax issues taking 10 years to be resolved, factory/ environmental regulations or disputes.
And, therefore, Skoda Auto, which has invested around €750 million in India, does not plan to invest further in the immediate future. However, the company will keep launching newer models in the country and continue its research and development projects.
“We have engaged Mahindra Engineering Services to help us with engineering aspects to create a design which is simpler and works in India and also matches Skoda specifications,” Rao said.
Meanwhile, the company launched refreshed versions of its Rapid sedan, available in both petrol and diesel, priced between ₹7,22,230 and ₹10,97,424 (ex-showroom, New Delhi).
The refreshed version of the sedan has new features such as Skoda Remote application to control the infotainment, new designed alloys, glossy black roof, cruise controls and parking sensors.