Auto stocks turn outliers in a weak market as government approves 75 auto firms for PLI scheme
- A total of 75 component makers have been approved by the government for incentives under the auto component PLI scheme.
- Maruti Suzuki, Hero MotoCorp, Toyota, Motherson Sumi are among companies that have been approved for the scheme.
- Auto company shares were among the outliers performing well in the weak market on Tuesday.
AdvertisementAbout 75 auto component makers have been approved by the government for incentive under the production linked incentive (PLI) scheme.
Maruti Suzuki, Hero MotoCorp, Toyota, Motherson Sumi, Bosch, Mitsubishi Electric and Tata Autocomp are among the list of companies that have been approved for the scheme.
PLI is a form of incentive from one entity to another, such as from the government to industries. It provides incentives to domestic industries to boost local production. The auto PLI scheme is aimed at giving a push to advanced automotive technologies and manufacturing of electric vehicles in India.
The government said that the PLI scheme for the auto sector envisages to overcome the cost disabilities of the industry for manufacture of advanced automotive technology products in India. The incentive structure will encourage industry to make fresh investments for indigenous global supply chains of advanced automotive technology products.
Reportedly over 100 companies had applied for the PLI scheme.
A report by CNBC-TV18 said that incentives in the range of 8-13% would be given to companies that are making components for safety, flex fuels, compressed natural gas (CNG), liquefied natural gas (LNG), emission control, passenger convenience, fuel efficiency, and sensors, while a higher range of incentives — 13 to 18% would be given to companies making components for hydrogen and electric vehicles.
While the market remained under pressure due to high inflation and geopolitical tensions, shares of automobile companies were trading higher on March 15.
|Auto companies||% change as of 2:15 p.m.|
|Mahindra & Mahindra||+2.20%|
What is Government PLI Scheme
PLI is a form of incentive from one entity to another, such as from the government to industries. It provides incentives to domestic industries to boost local production.
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