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  Business   Autos  19 Apr 2020  India's automakers seek tax cut to boost demand

India's automakers seek tax cut to boost demand

REUTERS
Published : Apr 19, 2020, 9:16 am IST
Updated : Apr 19, 2020, 9:16 am IST

Passenger vehicle sales in India fell 18% in the year to end-March 2020

 Automakers in India want a temporary tax cut on cars, trucks and motorbikes . (PTI Photo)
  Automakers in India want a temporary tax cut on cars, trucks and motorbikes . (PTI Photo)

New Delhi: Automakers in India want a temporary tax cut on cars, trucks and motorbikes as well as incentives to scrap old vehicles, to try to boost sales and generate revenue after the coronavirus outbreak has brought the economy to a standstill.

Passenger vehicle sales in India fell 18% in the year to end-March 2020, their steepest recorded fall in years, after weak economic growth in the country over the last year. That has been compounded by a nationwide lockdown to slow the spread of the novel coronavirus.

The Society of Indian Automobile Manufacturers (SIAM), an industry body whose members include domestic companies such as Maruti Suzuki and Tata Motors and local units of global car makers such as Volkswagen AG and Toyota Motor Corp, said it has sought government aid.

Companies want a temporary, 10% cut in tax on the sale of all automobiles and auto parts and incentives, in the form of tax rebates, for car owners to scrap their old vehicles, SIAM said in a media statement.

It did not specify how long it meant by temporary.

The automotive industry is the backbone of India’s manufacturing sector in terms of the employment it generates and its economic contribution.

The coronavirus outbreak has left it in “deep distress”, making financial support and a revival of demand a necessity, SIAM President, Rajan Wadhera said.

In common with other industries, auto manufacturing has ground to a halt and car showrooms have been shut since late March when Prime Minister Narendra Modi announced a 21-day lockdown to contain the virus’ spread. The lockdown has been extended until May 3 at least.

Tags: automakers, tax cut, coronavirus outbreak, auto sales, indian passenger vehicles, nationwide lockdown, maruti suzuki, tata motors, volkswagen ag, toyota motor corp, automotive industry, cars, trucks, motorbikes
Location: India, Delhi, New Delhi