Chennai: Asserting that the slowdown in the automobile sector is not region specific but is the result of the global economic slowdown, BJP state president Dr. Tamilisai Soundararajan said the Centre's measures will help to revive the automobile industry in the country.
Currently, the sector has been reeling under a consumption slowdown which is a culmination of several factors such as high GST rates, farm distress, stagnant wages and liquidity constraints. Besides, inventory pile-up at the dealership level and stock management of unsold BS-IV vehicles have become a problem for the sector.
As an ameliorative measure, Finance Minister Nirmala Sitharaman allowed government departments to purchase new vehicles to replace old ones. Further, she said all vehicles purchased till March 31, 2020 shall avail the benefit of additional depreciation of 15 per cent. It shall increase the higher depreciation on all vehicles to 30 per cent.
"The slowdown has also affected countries like the US and China. But Indian government is quick to respond to the issue," Dr. Tamilisai said and exuded the hope that the industry would soon regain its top position.
According to Society of Indian automobile Manufacturers (SIAM) president Rajan Wadhera, the removal of ban on purchase of vehicles by government department and 15 per cent higher depreciation for all types of vehicles purchased before March 30, 2020 should also give a definite boost to vehicle demand in the short term, especially vehicles meant for commercial use.
Mahindra Group Chairman Anand Mahindra in a series of tweets praised the slew of measures. He tweeted: "I applaud the methodical approach of 'bucketing' key drivers of the
economy & administering a healthy dose of 1st-aid to each. I'm naturally enthused that the auto industry was recognised as a major growth generator & given a bucket of its own."
Leading automobile manufacturer Hyundai Motor India MD & CEO S.S. Kim said: "We are optimistic that this move will boost the customer sentiment in the current market scenario and encourage customers acquisition of car in the coming festival season."
Jaguar Land Rover India President & MD Rohit Suri said: "While the increased depreciation from 15 per cent to 30 per cent and deferment of increased registration fees till June 2020 will have a positive impact, moderation of GST base rate from 28 per cent to
18 per cent for all categories as being requested by the auto industry for some time now would have been the real demand stimulant."
Volvo Car India's Managing Director Charles Frump said: "today's announcements by the government will rejuvenate the economy through flow of credit and revival of consumption."
