Automobile Makers want GST Cut, Incentives-based Vehicle Scrappage Scheme

· Passenger Vehicle Sales Fall to 20-Year Low in Q1

The automobile industry recorded a steep fall in sales during the last quarter, with passenger vehicle sales declining to their lowest in the last 20 years, and commercial vehicles sales dropping to a 15-year low, the Society of Indian Automobile Manufacturers (SIAM) said on Tuesday, 14 July 2020.

The association has once again asked for a temporary 10 per cent reduction in the standard GST rate across vehicle categories. This has been a longstanding request of the industry body.

It has also asked for an incentive-based vehicle scrappage scheme to generate demand. The incentives could be in the form of a 50 per cent rebate in GST, road tax and registration charges, it said.

Thirdly, it has asked the government for a procurement programme for diesel/ CNG buses by State transport undertakings (STUs), backed by adequate funding, similar to electric buses under the FAME-II scheme.

"We have been demanding some relief for the industry...the investments made in BS6 are tough to recover. It's up to the government to take a decision now," Rajan Wadhera, President, SIAM, said.

Recovery some way off

On the market returning to normalcy, he said, "Recovery in the market is anybody's guess. The situation returning to normal means the same numbers that we had in 2018. But, we guess that will take another four years to happen."

According to the latest report from SIAM, domestic sales of passenger vehicles fell (-78 per cent) to 1,53,734 units during April-June this year, as compared to 7,12,684 units in the corresponding period last year.

Two-wheeler sales declined by 74 per cent year-on-year (YoY) to 12,93,113 units during the last quarter as against 50,13,067 units April-June 2019.

In the commercial vehicles segment, the sales volume declined by 85 per cent YoY to 31,636 units during April-June this year as compared with 2,08,310 units in the same quarter of the previous year.

In the three-wheeler segment, sales volumes have declined by 91 per cent YoY to 12,760 units during the last quarter as compared with 1,49,797 units in April-June 2019.