The automotive industry seeks immediate political measures as sales continue to fall
NEW DELHI: body of the automotive industry SIAM on Monday sought immediate steps from the government, including reduction in GST rates and initiation of scrappage policy, as sales continued to plummet with passenger vehicle makers witnessing a decline of 30 per cent offtake in August. The Society of Indian Automobile Manufacturers (SIAM) said even the commercial vehicle and two-wheeler sales are significantly negative indicating that the market has still not responded to the various measures initiated by the finance minister Nirmala Sitharaman last month.
All this time, the industry has done everything possible to offer attractive offers and discounts to consumers.
However, the ability of the industry to provide large discounts is limited and this only highlights the need for government to consider reducing the GST rates from 28 per cent to 18 per cent which would significantly reduce the cost of vehicles and, in turn, create demand, SIAM president Rajan Wadhera said in a statement.
There is also an urgent need to present an integrated incentive-based waste disposal policy that covers all segments of the automotive industry as promised by the FM, he added.
The festival season is just around the corner, it is imperative that these decisions be taken quickly and announced without delay so that the industry can expect a better festival season that can drive a recovery in the industry, Wadhera said.
The series of announcements about the availability of credit and the reduction in the cost of credit that did not appear to have leaked to non-bank financial companies (NBFCs) that support most of the finances for the automotive industry, he added.
Consumer sentiment also remains low and there is clearly a lack of confidence in lending money to distributors, he added.
On Sunday, big companies like Maruti Suzuki India , Hyundai, Mahindra and Mahindra, Tata Motors and Honda reported a high double-digit decrease in sales in August.
While Maruti reported a 33 per cent drop in August sales at 1,06,413 units, sale of passenger vehicles by Tata Motors fell 58 per cent during the month under review.
Similary, Honda Cars India and Toyota Kirloskar Motor (TKM) sales fell 51 percent and 21 percent, respectively.
Similary, Mahindra & Mahindra (M&M) saw its domestic sales dip by 26 per cent to 33,564 units last month, compared to 45,373 units in August 2018.
On August 23, Sitharaman had presented a series of measures to boost investor sentiment and underpin the banking and automotive sectors.