Mumbai: Finance Minister Nirmala Sitharaman attributed the slowdown in auto sales due to fire due to the economic slowdown that continued on Tuesday.
One of the reasons for the recession, according to the Finance Minister, was a ‘change’ in the mindset of the people, who, they said, are now using cab aggregators like Ola and Uber and public modes of transportation. He also listed reasons such as the upcoming India Phase-6 (BS6) emission norms and higher registration fees.
One of the reasons for the recession, according to the Finance Minister, was the ‘change’ in the mindset of the people, adding that now cabs like Ola and Uber are using aggregators as well as public modes of transport.
Addressing a press conference in Chennai, she said, “The automobile sector, in particular, has been affected by many things. These include the BS6 movement, the registration fee issue released until June, and the mindset of millennials, who no longer prefer to pay EMIs to buy automobiles, but prefer to use Ola or Uber or take the metro.”
Regarding resolving the crisis, he said, “We are all in constant dialogue with various sectors and economic sectors, taking inputs not only in Delhi but from across the country.”
The Finance Minister’s comment comes in the midst of total domestic sales with a record 23.55% decline of 18,21,490 units in August 2019. Domestic sales of passenger vehicles also declined for the tenth consecutive month, a decline of 317.7% to 1,96,524 units in August 2019.
The numbers were released on Monday by the Society of Indian Automobile Manufacturers (SIAM).
India’s largest two-wheeler manufacturer Hero MotoCorp reported a 20% drop in sales last month, while Maruti Suzuki reported a 34% decline during the same period.
Mahindra & Mahindra’s total passenger vehicle sales touched a total of 13,507 units in the domestic market in August 2019. This was 32 per cent lower than 19,758 units disposed of by the company in August 2018.
On the question of reducing the Goods and Services Tax (GST) rate from 28% to 18%, the auto industry said, “I cannot take any decision on GST.”
Last month it announced several measures in an effort to help boost sales. Separately, it also announced the merger of various banks to strengthen the banking sector.