- Millennials prefer cabs over buying new cars, Nirmala Sitharaman said
- Working to solve the crisis in the automobile sector, she added
- India's auto sector has seen double-digit fall in sales
Finance Minister Nirmala Sitharaman on Tuesday said millennials' preference for Uber and Ola cabs over committing money to EMIs for new cars had affected the auto sector, which has seen double-digit fall in sales for both two and four-wheeler manufacturers, as well as a 70 per cent drop for truck makers Ashok Leyland. The minister said the centre was actively working to solve the crisis in the automobile sector, which has seen the loss of lakhs of jobs, and was "constantly interacting with different segments" to resolve the issue.
"Automobile sector, in particular, has been affected by several things. These include BS6 (Bharat Stage 6) movement, the registration fee issue that has been deferred till June and the mindset of millennials, who are now preferring not to commit EMIs to buying automobiles but prefer to use Ola or Uber or take the metro," Ms Sitharaman said.
"All of us are constantly interacting with different sectors and economic segments... not just in Delhi but taking inputs from around the country," the minister, in Chennai to highlight achievements of 100 days of the Narendra Modi government's second term in power, added.
The Congress, in a pointed reply to Ms Sitharaman's speech, asked if she also linked a decline in bus and truck sales to changes in behaviour of millennials.
The automobile sector, which employs more than three crore people, is reeling from one of the worst slowdowns of the past two decades.
Hero MotoCorp, India's largest two-wheeler manufacturer, reported a 20 per cent drop in sales last month. Maruti Suzuki suffered a 34 per cent reduction in sales for the same period. Sales of trucks and tractors have also been badly hit, with Ashok Leyland reporting a massive 70 per cent drop and M&M a 15 per cent drop.
Last month, in an effort to help boost sales, Ms Sitharaman announced a number of measures, including ordering government departments to buy new cars to replace old ones; there had previously been a ban on purchase of new cars.
She also deferred, till June 2020, a hike in vehicle registration fee, and clarified that BS IV vehicles purchased up to March 31, 2020, would be allowed to run despite the government introducing the stricter BS VI norms.
The troubled auto industry has also asked for a cut in a GST rate from 28 per cent to 18 per cent. However, the Finance Minister declined to comment on that request on Tuesday, only saying "I cannot singularly take a decision on GST".
The auto sector has said it is "cautiously optimistic" that sales will improve, highlighting the steps the government has taken. However, passenger car dealers have warned that unless the improvements happen in the next four months, the situation could go from bad to worse.
With input from ANI