Finance Minister Nirmala Sitharaman: Automobile industry is now affected by BS6 and millennials, who now prefer to have Ola or Uber
Finance Minister Nirmala Sitharaman: Automobile industry is now affected by BS6 and the mindsets of millennial, who now prefer to have Ola or Uber rather than committing to buying an automobile
Finance Minister Nirmala Sitharaman on Tuesday stated that the mindsets of millennial were adversely affecting the automobile industry as they prefer to use Ride-Hailing Cab services instead of buying own vehicle. "The automobile and components industry has been affected by BS6 and the mindsets of millennial, who now prefer to have Ola and Uber rather than committing to buying an automobile," said Finance Minister Nirmala Sitharaman while addressing reporters.
Earlier on 26th August, Sitharaman had initiated some landmark steps to revive the skidding sales and job losses in the automobile sector.
- BS-IV Vehicles Purchased before 1 of April 2020 will be operational till their registration period
- The release of Rs 70,000 crore for PSU banks recapitalisation and Rs 20,000 crore for National Housing Bank.
- All Govt Departments will be able to replace their old cars
- Increase in registration fees of two-wheelers and four-wheelers put on hold till June 2020
- Vehicle Scrappage policy to be revisited soon.
- Additional 15% depreciation, totalling to 30% on vehicles purchased till 30th March 2020
- Govts to focus on ICE and EV together, to build infrastructure for components including batteries for export
According to the figures from SIAM, The industry produced a total 12,020,944 vehicles including Passenger Vehicles, Commercial Vehicles, Three Wheelers, Two Wheelers and Quadricycle in April-August 2019 as against 13,699,848 in April-August 2018, registering a de-growth (-) 12.25 per cent over the same period last year.
The sale of Passenger Vehicles declined by (-) 23.54 per cent in April-August 2019, while overall Commercial Vehicles segment registered a decline of (-) 19.00 per cent in April-August 2019 as compared to the same period last year. Medium & Heavy Commercial Vehicles (M&HCVs) declined by (-) 28.98 per cent and Light Commercial Vehicles declined by (-) 12.70 per cent in April-August 2019 over the same period last year. In the Two Wheelers segment, Scooters, Motorcycles and Mopeds declined by (-) 17.01 per cent, (-) 13.42 per cent and (-) 20.39 per cent respectively in April-August 2019
The slowdown in auto sales also stems from a severe liquidity crunch in the nonbanking financial sector which has dried up lines of credit to both auto dealers and potential car buyers. The auto industry accounts for nearly half of India's manufacturing output and employs over 3.5 crore people directly and indirectly.