New Delhi: Auto industry leaders Wednesday asked the government for a stimulus package, including GST reduction on vehicles, for the sector which has been hit by an unprecedented slump in sales.
In a meeting with Finance Minister Nirmala Sitharaman, industry leaders, including Maruti Suzuki Chairman RC Bhargava, M&M President – Automotive Sector Rajan Wadhera, who is also president of SIAM, along with representatives from components sector body ACMA and dealers body FADA drew attention to the challenges, including job losses, faced by the industry.
“Yes, we have asked for certain enablers for the auto industry and they have thought on it. I am very hopeful that there will be a stimulus package (for the auto industry) coming soon,” Society of Indian Automobile Manufacturers (SIAM) President Rajan Wadhera told PTI.
The government wanted to understand from the industry about reasons for the slump in demand and possible solutions to the issue, he said, adding that the heavy industries ministry was supportive.
During the meeting, he said, the auto industry broadly presented factors such as issues regarding availability and affordability of financing, increasing cost of acquisition of vehicles and change in axle load capacity for commercial vehicles that have hurt demand.
He said the auto industry also reiterated that the pending notification of increase in vehicle registration fees should not happen as the sector is already reeling under stress of low demand.
Wadhera said the industry also apprised the government of the job losses in the sector following the sales slowdown.
On the availability and affordability of finance, he said: “Immediate measures are needed to reduce finance cost. We told them (government) that banks should be directed to pass on the repo rate cuts to the market.”
The auto industry also wants the government to direct banks not to reduce lending to those segments which has the lowest NPA, such as the passenger vehicles segment.