The demand for cars is unlikely to revive whenever buyers have trouble buying cars and two wheels due to the continuous increase in costs and the absence of respite in taxes, said RC Bhargava and Venu Srinivasan, two of the biggest names in India from the automotive industry.
“GST rates are more than double in India, compared to the EU, Japan or the United States, and taking into account lower-income levels in India, the affordability issue has entered. TPS is not the only thing. States have this single road tax, which takes the tax rate at 37-38% on cars. Do we need the kind of high taxes we have? I do not think the automotive market will revive, “said RC Bhargava, president of Maruti Suzuki, said.
Bhargava spoke at the 61st Annual Agreement of Indian Automobile Manufacturers (SIAM), which saw the participation of the CEO of Niti Aayog, the Secretary of Income, the Ministry of Finance, Tarun Bajaj and a crowd of others CXO of automobiles.
“Not seen from action to reverse the industry decline”
“The Center and States must reconsider high taxes on automobiles. Green mobility will not take off if we address the issue of affordability. We have not seen any action on the ground to reverse the decline of the automotive industry. India does not look at income, payment capacity and job creation while making mobility plans, “added Bhargeva.
The global automotive volumes for the 2002 fiscal year on the domestic market pushed the six-year-old industry, according to SIAM data. FY21 volumes for tourism vehicles were the lowest as the lowest FY16 and two-wheeled volumes since the 2015 fiscal year. Sales of commercial vehicles in the 2001 fiscal year were the worst in 11 years, while for Three wheels were the lowest in 19 years.
2-wheels taxed at the same level as luxury cars
“Is the automotive sector recognized for what contributed to the environment, income and foreign exchange revenue? And that is, Mr. Bhargava’s question, “said Venu Srinivasan, President and CEO of the Executive Director, TVS Motor Company.
India’s two-wheeled industry is the largest in the world. The vehicle is widely regarded as a fundamental necessity of the family rather than a luxury. But be taxed (GST) at the same level as luxury cars, car manufacturers have raised problems with the government’s tax policy.
“The price of the moped has increased by 45 to 50%. The TPS on two wheels is the same as that of a luxury product, but is a basic mode of transport. The transition to the BS6, the cost of the ABS, the decision of the Supreme Court on the compulsory purchase of a three-year insurance and a one-off tax pushed prices of two superior wheels. I think we have brought too many bass tax benefits on other products that have made one of the main engines of global growth for Staller, “added Srinivasan.
The automotive industry striking the advanced production capacity
Respond to the above concerns, Tarun Bajaj advised Siam to do an analysis of the reasons for the slowdown in the sector. “Siam should do a deeper analysis and come back with what changes you need. Is Covid-19 problem or something else? We have to understand what has led to the fall of demand since 2017-2018, “Bajaj said.
To be safe, the automotive industry hits advanced production capacity, several companies starting the third and final offset to their factories. The waiting periods stretched at 6-9 months on certain models, due to the lack of availability of semiconductors.
“The SUVs are doing very well but compact cars are not. I see a new model model almost every day and there are waiting periods on some models. It is therefore necessary to do a thorough analysis on why the automotive sector is the condition that it is found, “Bajaj added.
