FM Nirmala Sitharaman's explanation for auto slowdown: Millennials prefer Ola, Uber

Cornelia Mascio
Сентября 11, 2019

On skidding sales and job losses in the automobile sector, the minister said that the government departments have been allowed to buy new vehicles.

Sitharaman was addressing reporters in Chennai to mark the National Democratic Alliance (NDA) government's first 100 days in office in its second consecutive term.

The Centre is now expected to take the proposal of reduction in tax rates on cars to the GST Council, which is meeting in Goa later this month.

Carmakers have sought an immediate cut in GST on vehicles to revive sales during the crucial festive season, after auto sales declined for the 10th straight month.

"Some studies do tell us that mindset of millennials, who are now preferring not to commit an EMI (equated monthly installment) for buying an automobile, instead prefer to take Ola, Uber, everything else, or take the metro".

Who is to blame for the current slowdown in the automobile industry?

Automobile sales witnessed its worst-ever drop in August across categories, with passenger vehicle sales falling by as much as 41.09 per cent, according to data released by industry body SIAM.

Sitharaman said the automobile sector has been affected by several issues, including the move to Bharat Stage-VI emission norms from 2020.

The Finance Minister also said the government will respond soon to the demands of home buyers. In August 2019, overall sales stood at 18,21,490 units against 23,82,436 units in the same month a year ago.

The sector slowdown has led to companies resorting to production cuts even as many dealers have laid off employees or shut shop themselves.

Besides BS-IV vehicles bought till March 31, next year will remain operational for their entire registration period.

Responding to the criticism of the government accessing the accumulated reserves of the Reserve Bank of India, she said it had been accessed by the governments in the past too.

While stating that bank mergers were announced for the banks to benefit from each other, the FM said the date of merger had to be decided by the boards of respective banks.

On the dip in GDP growth, she said, "I am not underestimating it or sitting here without responding to do something to boost it to grow better". The GDP growth rate is at five percent in one quarter, we won't compare it with earlier times.

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