Indian Automotive Sector Requests Centre for Reviving Demand: Report

The Indian automotive sector goes via its hardest spell but with the nation being beneath lockdown which has meant that their gross sales have gone down not like ever earlier than. This is on prime of the truth that the trade has been recording poor gross sales numbers month after month, registering a decline in development in gross sales, even earlier than the lockdown got here in place. Add to that the truth that the BS-VI emission norm has come into place from April 1, 2020, and the scenario has by no means been so grim – with manufacturing traces shut, dealerships closed, unsold BS-IV stock and given the financial influence that the Coronavirus pandemic is predicted to have, an anticipated sharp decline in demand for automobiles within the coming time. As a end result, the automotive trade has reached out to the central authorities asking for a revive in demand, as per a report by CNBC TV18.

“We need a quick increase in demand in the short term. One of the ways by which the government can boost demand is by reducing GST for a limited period. Once the demand goes up, the revenue shortfall will be cushioned,” cites the report courtesy Manohar Bhat, Head, Sales and Marketing at Kia Motors.

SIAM, ACMA and FADA – the three main auto trade our bodies have requested the federal government for measures that might tackle liquidity crunch, demand and provide chain disruptions. This is together with the hope of the centre and states contemplating a short-term discount in GST, as per the report.

It goes on to say that SIAM has instructed the introduction of postponement of sure regulatory norms, a scrapping coverage and availability of working capital at concessional charges, together with the request to the federal government for making certain unhindered transportation of products and tackle provide chain points as soon as the lockdown is lifted.

Nikunj Sanghi, Former President of the FADA, mentioned to CNBC TV18, “The RBI may have imposed a moratorium on loan repayment, but there is no moratorium on interest. Dealers will incur a huge cost due to accumulation of interest on term loans and working capital at a time when the existing inventory cannot be sold. The RBI should impose a moratorium on interest payment as well or OEM’s can absorb it.”

We should wait and see how the auto trade copes up with the consequences of the lockdown as soon as it lifts, every time that’s, and the way the businesses soak up the prices of unsold stock and handle to collect curiosity of their upcoming automobiles.

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