PUNE: The Indian auto industry, the world’s fourth largest and Asia’s third biggest, with two-wheelers segment dominating the market, continues to move in reverse gear. Auto honchos said it was facing the most challenging times ever.
The woes of the sector, the third-largest employer in the country, has only multiplied due to facing distress for straight three months of fiscal 2020 with sliding sales across segments as buyers continued to put off purchases due to higher cost of ownership, liquidity crunch and rising automobile prices.
The tractor, heavy commercial vehicle and passenger vehicle sales continued their downward trend, indicating a slowing economy across sectors, with automakers now banking on badly needed stimulus in the Budge on Friday to spur growth.
Maruti Suzuki, India’s top car maker and Hyundai, the second biggest car maker, which together command nearly 70 per cent of the car market, have dragged down sales both in June and in the Q1 of fiscal 2020. Tata Motors, Toyota Kirloskar and Honda Cars were no better.
“Auto industry has been de-growing for the past 4 quarters. Customer sentiments remained low due to the overall slowdown in economic growth. Consumer expectations on revised GST rate on cars and limited liquidity availability kept them from firming their buying decision,” said Sibendra Barman, Vice President, Sales- Marketing at Passenger Vehicles, Tata Motors.
“The GST rate on all categories of vehicles should be brought down to 18 per cent from current 28 per cent to kick-start growth again in the Indian auto industry,” Vishnu Mathur, Director General at the Society of Indian Automobile Manufacturers, told Financial Chronicle.
He said a fleet modernisation programme should be introduced to get the polluting, unsafe and old vehicles off the road.
Also, the corporate tax rate for all companies should be brought down to 25 per cent, as promised in earlier budget speeches.
