India’s Automobile Industry body ACMA recently had expressed that around 10 lakh jobs could be on risk if the prolonged slowdown in the automobile sector continues, while expecting immediate government intervention and serious reforms or policies to be carved out as soon as possible. They had also demanded such as slashing GST to stimulate demand and spur growth.
India’s largest car manufacturer Maruti Suzuki India Ltd had announced a steep 36 per cent decline in sales in July, 2019 at 98,210 units sold as compared to 154,510 units in the same month in 2018. This was the first time since June 2017 when Maruti has sold less than 1 lakh units in a month. That time, dispatches to dealerships were forecasted low on account of roll out of Goods and Services Tax in July 2017. The percentage decline itself is so huge that Maruti was hard pressed to answer when was the last time sales had declined by a bigger quantum in a particular month.
If we look at other Indian and Foriegn car manufaturers including companies like Hyundai Motor India and Mahindra and Mahindra that have multiple new launches in the last 12 months for a cushion. Hyundai had brought back the Santro in a new avatar in October last year and followed it up with its maiden compact SUV Venue in May this year. Still, it registered a 10 per cent decline in sales last month. Similarly, Mahindra, which has launched the Marazzo MPV, Alturas premium SUV and XUV3OO compact SUV, also posted a 15 per cent dip in sales.
- Existing unsold automobiles ( 2,3,4 wheelers)stocks with dealers , Manufacturers stockyards – government should offer refunds of all taxes, no registration charges or any other levies so vehicles can be sold out at discounted prices – scheme valid till 31st December 2019.
- Give GST tax holiday ( and all other levies , registration charges)for 3 years from Jan 1 2020 for all petrol (not diesel)BS 6, HYBRID AND ELECTRIC VEHICLES AND THEIR AUTO COMPONENTS.
- Vehicles above 10 years not to ply in major cities in India.
- Compulsory scrap-age of all vehicles 15 years old and above.
- Allow exports of used cars with incentives.
- Reduce / zero interest rates for all auto loans – Lower EMI schemes till March 31st 2020 (backed by collateral/ guaranty)
Urgent & Immediate package for India’s Automobile Industry
Terming the situation as “unprecedented”, ACMA President Ram Venkataramani said vehicle sales in all segments have continued to plummet for the last several months thus impacting the component segment as well.
“Considering the fact that the auto component industry grows on the back of the vehicle industry, a current 15-20 per cent cut in vehicle production has led to a crisis-like situation,” he said, adding “if the trend continues, the layoffs are inevita…
The automotive component industry contributes 2.3 per cent to the country’s GDP providing employment to 50 lakh people.