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Demand creation major hurdle for auto sales: SIAM
Demand generation will be a major challenge for the Indian auto industry, as the lockdown measure is expected to dent the economy hard, an industry body said
New Delhi: Demand generation will be a major challenge for the Indian auto industry, as the lockdown measure is expected to dent the economy hard, an industry body said.
The auto industry has been struggling for some time now, earlier the general economic slowdown had hampered its growth during 2019, and now the production, sales and financing constraints unleashed by the lockdown has further dented the sector's fortunes.
Currently, production at factories and suppliers have been halted so are the functioning of dealerships. The lockdown which has been deemed necessary to curb the spread of Covid-19, has dealt a heavy blow to commerce, leading to a temporary closure of shopping malls, grounding of aircraft, shutting down of factories and deserted market places.
According to Society of Indian Automobile Manufacturers' (SIAM) Director General Rajesh Menon: "Indian automobile industry is going through its most stressful period with specific challenges related to demand, supply and availability of finance because of Covid-19 related lockdown. Demand creation would be a major challenge."
Consequently, the industry body has sought a stimulus package from the Centre. "Government should include Temporary Reduction in standard GST rate by 10 per cent across all vehicle categories in the stimulus package," Menon said.
At present, automobiles attract 28 per cent or more GST, excluding Cess charges, insurance cost and other sector-specific taxes.
