Finance Minister Nirmala Sitharaman in a press conference on Tuesday said that the government is fully aware of the ongoing slowdown in the automobile sector and is taking measures to revive the growth.
Citing the reasons for sluggish growth in auto sales, Sitharaman said slowdown is not just because of a higher tax but also due to several reasons including the change in people’s mindset who prefer cab aggregators like Ola, Uber and public transportation.
“The automobile industry in India did have its good time, at least till two years ago. There was definitely a good upward trajectory for the automobile sector. Now it is affected by the transition to Bharat Stage VI emission norms; a higher registration fee; and the mindsets of millennial, who now prefer to have Ola or Uber rather than committing to buying an automobile,” said Sitharaman.
At present, the industry’s sales have been on a downslide since the last 10 months due to a high GST rate and lack of adequate liquidity. It had recorded a slump of 18.71 per cent in July, the highest monthly sales de-growth in the last 19 years.
The demand for another stimulus arose after August’s sales data showed that overall sectoral offtake in the domestic market has plunged 23.55 per cent. This level of downturn was witnessed only once earlier, in December 2000, when the de-growth was registered at 21.81 per cent.