Toyota Expects Government’s Measures For Automakers To Boost Overall Sentiment
The government has announced several measures to help the auto sector recover from its worst slowdown in more than a decade.
Toyota Kirloskar Motor Pvt. Ltd. on Monday said the finance ministry’s measures to boost the economy will lift the overall sentiment, which is important for growth.
“Over the last one month, the finance minister has been having a good consultation with the industry. I’m pleased she is taking measures to make business easier,” said Vikram Kirloskar, vice chairman at the maker of Innova and Fortuner utility vehicles.
The government on Friday announced several measures to help the auto sector recover from its worst slowdown in more than a decade. That include clarity on vehicles to be sold before stricter emission standards kick in, a new scrappage policy and lifting the freeze on government departments, urging them to buy new vehicles, among others. It, however, didn’t outline any major fiscal support or cuts in the goods and services tax that businesses had been calling for, focusing instead on steps to spur foreign funds and lending.
“The auto industry has also been lobbying hard for lower GST rates by teaming up with state governments,” Kirloskar said. “It’s up to us as automakers. All automakers are trying to persuade state governments for a GST cut from the viewpoint of inventory and employment. It’s a tough call.”
Kirloskar also hopes that demand would revive this festival season. “There are a couple of issues in car sales. Costs have gone up; GST, taxes, registration rates and insurance have spiked the basic cost of the car. Time taken to get a loan has also increased because retail finance involves delays on account of various processes, and this is taking a toll on sales.”
Banks, he said, will also have to work with non-banking financial companies to make sure there is sustained growth in the auto sector.
Watch the full interaction here: