Finance Minister Nirmala Sitharaman on Tuesday responded for the crises over auto sector by saying “millennials’ preference for Uber and Ola cabs over committing money to EMIs for new cars, as the main reason that had affected the auto sector.
Added further, some studies do tell us that there was a change in the mindset of the millennials not to commit any EMIs (equated monthly installments) towards buying an automobile and instead of taking Ola and Uber or the Metro (train) services
Ms. Sitharaman said, apart from the cabs preference, automobile sector has been affected by several other factors also including BS6 (Bharat Stage 6) movement, the registration fee issue that has been deferred till June and the mindset of millennials, who are now preferring not to commit EMIs to buying automobiles but prefer to use Ola or Uber or take the metro.
However, the centre was actively working to solve the crisis in the automobile sector, which has seen the loss of lakhs of jobs, and was “constantly interacting with different segments” to resolve the issue.
While making an effort to revive the auto sector by boosting the sales, Ms. Sitharaman announced a number of measures, including ordering government departments to buy new cars to replace old ones; there had previously been a ban on the purchase of new cars.
She also deferred a hike in vehicle registration fee till June 2020 and clarified that BS-IV vehicles purchased up to March 31, 2020, would be allowed to run despite the government introducing the stricter BS-VI norms.
Meanwhile, the troubled auto industry has also demanded to bring a reduction in the GST rate from 28 percent to 18 percent. However, the Finance Minister declined to comment on that request on Tuesday, only saying “I cannot singularly make a decision on GST”.
Hero MotoCorp, India’s largest two-wheeler manufacturer, reported a 20 percent drop in sales last month. Maruti Suzuki suffered a 34 percent reduction in sales for the same period. Sales of trucks and tractors have also been badly hit, with Ashok Leyland reporting a massive 70 percent drop and M&M a 15 percent drop.