Union Finance Minister Nirmala Sitharaman on Tuesday said that the major reason behind the decline in the of sales of automobiles is the millennial mindset of using radio taxi services like Ola, Uber instead og buying personal vehicle.
Sitharaman while addressing to media said PM Narendra Modi led NDA government has taken landmark steps in its 2nd term for India which will help India emerge as a five trillion-dollar economy in the coming five years amidst a domestic and global slowdown.
The minister also said that, keeping in mind the sliding sales and massive job losses in the sector, the government departments have been allowed to buy new vehicles.
Also, Automobiles which will be purchased by 31 March next year can benefit the advantage of additional depreciation of 15% with total depreciation up to 30 per cent. In addition to that, for BS-IV vehicles purchased till 31 March, next year will remain operational for their entire registration period.
The automobile sector is facing constant drop in the sales in last few months. Domestic passenger vehicle sales dropped for the 10th consecutive month, tumbling from 287,198 units in August last year to 196,524 units last month; a total dip 31.57 per cent.
Moreover, according to SIAM the commercial vehicles sale went down 38.71 per cent to 51,897 units in August. Overall automobiles sales across categories recorded a decline of 23.55 per cent to 1,821,490 units from 2,382,436 units in August 2018, it reports.
The recent dip in auto and auto-components sales also led to severe liquidity crunch in the non-banking financial sector which has desiccated up options of credit to both auto dealers and buyers. The auto industry in India is a huge market that accounts for approximately half of India’s manufacturing output and provides employment to more than 3.5 crore people directly and indirectly.