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Nirmala Sitharaman: ‘Millennial Mindset’ Affecting Automobile Sector

Written By Monica Aggarwal | Mumbai | Published:

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  • Nirmala Sitharaman said that automobiles industry is being affected by BS6 and the 'mindsets of millennial'
  • She said that that millennial now prefer Ola or Uber rather than buying an automobile, which can be affecting the sector

Union Finance Minister Nirmala Sitharaman on Tuesday said that the automobiles industry is being affected by BS6 (Bharat Stage) and the mindsets of millennial, as reported by news agency ANI. Nirmala Sitharaman, addressing the reporters, stated that it is the mindsets of millennial who are preferring app-based taxi service including Ola and Uber rather than committing to buying an automobile which is affecting the auto sector. 

"The automobile industry is now affected by BS6 and the mindsets of millennial, who now prefer to have Ola or Uber rather than committing to buying an automobile," the Finance Minister said. 

READ | Nirmala Sitharaman: 'Sanctioning & monitoring of big loans separated'

Nirmala Sitharaman assurance betterment

Nirmala Sitharaman had assured that the Modi government will respond to the demands of the automobile industry in the light of the worst decline that it is facing recently. She went on to assure the buyers and manufacturers in the automobiles industry that vehicles compliant with Bharat Stage IV emission norms registered before March 31, 2020, will be able to run for the entire registration period of the vehicle. 

“The automobile industry in India did have its good time, at least till two years ago. There was definitely a good upward trajectory for the automobile sector,” Sitharaman said

She had also stated that the PM Modi-led government has taken landmark steps for India in its second term in order to achieve the five trillion-dollar economy goal in the next five years amid an economic slowdown.

READ | Bank reforms: Key Highlights of Nirmala Sitharaman's announcements

Automobiles industry suffers slowdown

The automobiles industry suffered its worst-ever performance in two decades with the decrease in demand showing no sign of improvement. Domestic sales of passenger vehicles plunged 31.6% in August to 1,96,524 units from the last year, according to data released by the Society of Indian Automobile Manufacturers (SIAM). It was the 10th straight decline in domestic passenger vehicle sales and the worst in the history of SIAM’s compilation of monthly sales data since 1997-98. 

READ | Finance Minister Sitharaman promises relief to automobile industry

Measures to tackle automobile industry slowdown

Earlier in August, the Union Minister had announced the government's measures to tackle the concerns of the slowing automobile sector. Here are the major steps that were taken by the government as announced by Nirmala Sitharaman on August 23:

  • BS-IV vehicles purchased until 31 March 2020 will remain operational for their entire registration period.
  • Revision of the one-time registration fee has differed till June 2020. 
  • Inventories are currently stocking up in factories. Depreciation value of all vehicles has been increased to 30% from the current 15% acquired from now till March 2020.
  • Both electric vehicles and internal combustion vehicles will be registered. 
  • To boost demand, the government will lift the ban on the purchase of new vehicles to replace old vehicles for government departments. This will boost the income of car manufacturers and then flow into car components' manufacturers' hands.
  • The government will consider various measures including scrappage policy. Since we do not have the infrastructure to implement scrappage policy to provide money to those wishing to sell their old vehicle as scraps, we are holding onto it for now.

READ | Nirmala Sitharaman announces 6 measures for automobile sector's issues

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