Nirmala Sitharaman Says India’s Auto Slowdown Due To Change In People’s Mindset
Finance Minister Nirmala Sitharaman. (Photo: PTI)

Nirmala Sitharaman Says India’s Auto Slowdown Due To Change In People’s Mindset

The slowdown in auto sales is not just because of a higher tax but also due to several reasons, including the change in people’s mindset who prefer cab aggregators like Ola, Uber and public transportation, Finance Minister Nirmala Sitharaman said on Tuesday.

“The automobile industry in India did have its good time, at least till two years ago. There was definitely a good upward trajectory for the automobile sector,” Sitharaman told reporters in Chennai, adding that the sector has been affected by the transition to Bharat Stage VI emission norms and a higher registration fee.

Some studies show that millennials do not want to commit to an equated monthly installment to buy a vehicle, and prefer Ola, Uber and metro services, she said.

The sales of cars and utility vehicles witnessed the worst monthly decline in August. Domestic sales of passenger vehicles fell 31.6 percent year-on-year to 196,524 units in August, according to data released by Society of Indian Automobile Manufacturers on Monday. That’s the worst decline since 1997-98 when SIAM started recording data.

The finance minister said that she would not comment what will be considered at the GST Council meeting on Sept. 20. The auto sector has demanded a GST rate cut and the GST Council has to decide on that, she said.

The government, she said, is considering more measures it can take to help the auto sector. “We are seized of the problem and will try to solve it.”

BQ Install

Bloomberg Quint

Add BloombergQuint App to Home screen.