Indian Auto Industry Reacts To Finance Minister’s Stimulus Package
The auto sector has been battling a severe downturn, thanks primarily to a drop in demand and to confusion over some upcoming regulations. Finance minister Nirmala Sitharaman on Friday, announced a slew of measures to boost demand for the auto sector. The key demand for reduction of the GST on vehicles has not been agreed to. Yet!
“The industry highly appreciates that the FM has responded with a package of measures within 2 weeks of its consultation with the industry” Mr Rajan Wadhera, President, SIAM.
Ashish Harsharaj Kale, President FADA said "All our points of concerns and Suggestions have been listened to seriously and most have been actioned by the H'ble FM and We appreciate and Welcome all the initiatives today. FADA is quite Confident that these measure will definitely uplift customer sentiment for the upcoming festive season and the Dealer Community has a Very Positive hope that Demand in auto sales would soon Pick up and turn to the Positive.”
Mr. Venu Srinivasan, Chairman, TVS Motor Company said “These measures will provide the immediate relief that the industry was seeking. The promptness of this government’s response is reassuring for not just industry, but for the common man as well because it’s putting liquidity into the market and easing the squeeze on the small and medium sector. While there are indications of a global slowdown, this government has demonstrated its resolve to mitigate the impact of that in India through these measures. This is the stability and proactiveness that industry wants.”
Mr. Vikram Kasbekar - Executive Director - Operations (Plants) and Chief Technology Officer, Hero MotoCorp. said "We welcome the measures announced by the Honourable Finance Minister today, to improve liquidity, increase ease of lending and transmission of rate reduction to the ultimate borrower. The announcements specific to the automotive sector provide clarity and positivity to both OEMs and customers.
However, we would reiterate our request that two-wheelers, which are neither luxury nor ‘sin’ goods, require a reduction in the rate of GST from 28 to 18%. This will help boost demand immediately, leading to an even more positive impact. We hope this will be addressed in the next round of measures."
Mr. Rajesh Goel, SVP and Director, Sales and Marketing, Honda Cars India Ltd. said “The measures announced by the government will definitely instill a positive sentiment both among consumers and dealers, thus helping to improve retail, wholesale and overall purchase pattern in the sector. The clarification on the validity of BS4 vehicles and the future of Internal Combustion vehicles, in addition to deferring proposed vehicle registration fee hike, will help to address the issue of postponement of purchases and customers will buy BS4 vehicles. The additional 15% depreciation benefit will catalyze the retail demand through buying by businesses and corporates. We are hopeful that such measures by the Govt. will provide an impetus to the industry.”
“ Today’s announcements by the government will rejuvenate the economy through flow of credit and revival of consumption. The government has clearly signalled full support to the automobile industry which is reeling under a prolonged slowdown for more than 12 months now. The decision to allow a higher depreciation on cars, interest rate cuts and BS4 vehicles to run their life of registration will boost demand for the industry. The speed with which the government has responded after meeting various representatives of the industry is also highly appreciable.” – Charles Frump, Managing Director, Volvo Car India.
“We highly appreciate the approach of the Government and the support with regards to the automotive industry taken. Now it is up to the banks and NBFCs to deliver the trust and benefit given. We are confident that the ease of access on loans to consumers will also be improved by banks. Independent of this we have had and will continue to have strong in-house financing that customers can continuously rely on.
Additionally, the clarity on BS-IV vehicles and decision to support all fuels will remove the confusion that customers are facing. We have always maintained that luxury is not a sin and are thus enthused by Government's focus on reviewing the Super Rich tax. This should improve customer sentiment specifically in the luxury industry.” – Rahil Ansari Audi India Head
Nagesh Basavanhalli, MD & CEO, Greaves Cotton Limited: "Government's slew of measures announced yesterday is a timely step and it will provide the much needed boost to revive the automobile and allied sectors. Relaxation on sale of old BS IV vehicles, equal impetus to ICE and EV growth along with bank recapitalization and passage of repo rate benefit to customers will improve market sentiments and we will start seeing the positive impact on the automobile industry. Time bound credit of GST refunds and streamlining of KYC norms for NBFCs will also improve the liquidity situation."
