The finance minister presented a seriously good budget plan. However, it didnt help the fossil fuelled auto sector much. For the straight 10th month, auto sales have plummeted. Various reasons can be attributed to the same. The transition to BS-VI, higher procuring costs and now a revelation from the finance minister herself. Nirmala Sitharaman, the Indian finance minister, says that millenials prefer using cabs over buying vehicles. Cab aggregators like Uber and Ola must be quite happy listening to this. She further added that the government officials have been given the go-ahead to buy cars right now. So, may be some lucky automobile company will get a bulk order for SUVs or sedans soon.
The government, last week, assured the public and automakers that electric vehicles and petrol/diesel ones will co-exist. Global economic conditions have been blamed for the low sales in India and the government is finding ways to revive it as well. There are talks that the GST being levied on automobiles will be slashed to provide some impetus in an ailing yet critical sector. More than five crore people are directly or indirectly associated with the auto industry in India. This will mean the livelihoods of these are at stake. Many companies also announced “no production” days. This means the daily wage workers will not receive their money.
We believe the slump is because people prefer not buying vehicles right now. It is cos of the bad condition of the roads. The roads in Maharashtra are in a pathetic state and there are talks that other states too are facing a similar crisis. Moreover, buyers will be waiting for huge discounts in the same vein as the 2017 sales. The transition to BS-IV saw many two wheeler makers offering slashed rates as well as free vehicles on purchase of a higher priced one. Something similar is expected on March 31, 2020.