SIAM recently held that the sales report coming out from various
companies for the month of August 2019 has been very dismal with over 30 per
cent erosion of sales for passenger vehicles(PVs). The commercial vehicle (CVs)
and two wheeler sales are also significantly negative indicating that the
market has still not responded to the various measures initiated by the Finance
Minister, last month.
The series of announcements on credit availability and reducing the cost
of credit that were made do not seem to have percolated down to the NBFCs
which support the bulk of finance for the automotive industry. The consumer
sentiment also continues to be low and there is clearly a trust deficit in
lending money to the dealers.
All this while, the industry has pulled out all stops in offering
attractive deals and discounts to the consumers. However, the ability of the
industry to provide large discounts is limited and this only highlights the
need for Government to consider reducing the GST rates from 28 per cent to 18
per cent which would significantly reduce the cost of vehicles and in turn
“As the festival season is around the corner, it is imperative that these
decisions are taken quickly and announced without delay, so that the industry
could hope for a better festival season that could harbinger a recovery in the
industry,” stated Rajan Wadhera, President, Society of Indian Automobile
SIAM also warned that there is an urgent need to come out with an
integrated incentive based scrappage policy covering all segments of the auto
industry as promised by the Finance Minister.