For the first time in the automobile history of India, no vehicles were sold for a whole month. While all companies drew a blank in the domestic market, some players like Maruti, Hyundai and Mahindra could export a few hundred units as the entire country is under the Coronavirus lockdown.
Mr Ashish Harsharaj Kale, President, Federation of Automobile Dealers Associations (FADA), has said that the automobile industry will be looking to forget the April month as the complete automobile ecosystem was affected. He stated that the auto sales don’t just contribute 8 per cent to the national GDP but also is linked to several other sectors such as banks, components, insurance companies, service, paint, oil, rubber, glass, plastic and more, and generates direct and indirect employment.
Reduction in GST & incentive-based scrappage scheme can revive the auto industry
Mr Kale has also said that they have made few suggestions to the government to revive the automobile industry including reduction of GST rates temporarily till the market returns to normalcy. This will have a direct benefit as automobile have the highest taxes and a reduction in interest rate will reduce the cost of ownership. Other suggestions like incentive-based scrappage policy that has been expected to be introduced for a long time could also do wonders for the revival. Inclusion of the auto industry in Priority Sector will make retail and wholesale financing easy from banks while extending the Depreciation Benefits scheme until FY 2021 to benefit individuals.
About 20 electric vehicles from the big companies are lined up over the next 2.5 years
While the lockdown has affected the Indian automobile industry, the reduction in air pollution and fresh air will surely make the case for zero-emission electric vehicles stronger. Many experts believe that the current situation has made people consider electric vehicles more than ever and there would be a spike in sales of two-wheelers and entry-level cars as many don’t see public transport as an option in the short-term. With India’s EV scene beginning to take off with mainstream players Bajaj, TVS, Hero Motocorp and Suzuki riding in scooters, and companies like Mahindra, Ford, Maruti, Hyundai, MG and Tata Motors developing affordable electric cars, the EV industry is set to quickly evolve post the coronavirus pandemic.