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Maruti differs with Nirmala Sitharaman, says Ola, Uber not big factor in auto crisis

Due to increased prices of auto parts, taxes and rise in insurance rates are some of the reasons for slow down in automobile industry.

New Delhi: On Tuesday, Union finance minister Nirmala Sitharaman had said the slowdown in the automobile sector was because of many factors like the change in the mindset of millennials who prefer taxi aggregators such as Ola and Uber instead of committing themselves to monthly instalments to own a car. But the Maruti Suzuki India (MSI) has said that cab aggregators like Ola, Uber may not be a big factor in the slowdown.

Ownership pattern in India still has not changed and people purchase cars with an “aspirational aspect”, MSI Executive Director (Marketing and Sales) Shashank Srivastava told PTI in an interview here.

“The Ola and Uber factor may not be strong to contribute to the current state of slowdown. I think we need to watch and study it more before arriving at such a conclusion. Ola and Uber came into existence during last 6-7 years. In this period, the auto industry also saw some of its best times. So, what happened only during last few months that the downturn became so severe? I do not think it is only because of Ola and Uber,” Srivastava said.

He said that India has 46 per cent of the car buyers who are first time users. People may use public transport like Ola and Uber to go to offices on weekdays, but still they buy a vehicle for the weekend outings with the family, he said.

“The pattern of ownership in India has not changed yet. We have to watch on a longer period to see if there is a structural change in buying pattern,” Srivastava added.

Due to increased prices of auto parts, cash crunch, taxes and rise in insurance rates are some of the reasons for slow down in automobile industry.

Market leader Maruti Suzuki India (MSI) said its domestic sales were down 36.3 per cent at 98,210 units last month compared to 1,54,150 units in July last year. It was in June 2017 that the company's sales had last fallen below 1 lakh units mark in a month

Exports in August were down by 10.8 per cent at 9,352 units as against 10,489 units in the corresponding month last year, the company said.

(With agency inputs)

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