Lok Sabha Question No. 327 (STARRED), answered on 2020-03-17
Subject: Decline in Auto Sales
Ministry: HEAVY INDUSTRIES AND PUBLIC ENTERPRISES
Asked by: Shashi Tharoor

## GOVERNMENT OF INDIA MINISTRY OF HEAVY INDUSTRIES & PUBLIC ENTERPRISES DEPARTMENT OF HEAVY INDUSTRY

## LOK SABHA STARRED QUESTION NO. 327

ANSWERED ON 17.03.2020

## DECLINE IN AUTO SALES

## 327. DR. SHASHI THAROOR:

Will the Minister of HEAVY INDUSTRIES AND PUBLIC ENTERPRISES भारी उद्योग एवं ऱोक उद्यम मंत्री be pleased to state:

(a)  whether  the  Government  holds  cab-aggregators  and  different  mindset  of  millennial generation,  as  the  main  reasons  for  debilitating  decline  in  overall  auto  sales  across  the country;

(b)  if  so,  the  details  thereof  including  other  factors  responsible  for  low  sales  in  smaller towns as cab-aggregators are largely restricted to metro cities;

(c) if not, all the relevant factors responsible for such decline;

(d)  whether  the  sales  of  two-wheelers/tractors  which  are  the  key  barometer  of  rural economy, have also dropped by 22.24 per cent;

- (e)  if  so,  the  details  of  sales  of  two-wheelers/tractors  during  the  last  three  years  and  the current year, State/ UT-wise;

(f) whether the Government is considering revival measures such as GST cut from 28 per cent  to  18  per  cent  for  automobile  sector  to  reduce  vehicles'  cost  and  in  turn,  create demand thereof; and

- (g) if so, the details thereof and if not, the reasons therefor?

## ANSWER THE MINISTER OF HEAVY INDUSTRIES & PUBLIC ENTERPRISES (SHRI PRAKASH JAVADEKAR)

- (a) to (g): A statement is laid on the Table of the House.
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## Statement referred to in reply to parts (a) to (g) of Lok Sabha Starred Question No. 327 for 17.03.2020 asked by Dr Shashi Tharoor regarding ' Decline in Auto Sales '

(a) to (g):  There are cyclical slowdowns across various sectors, including the automotive sector for the last few months. Changing millennial preferences and cab aggregators may be amongst the various reasons for this slowdown, which include:

-  BS VI vehicle inventory adjustments by OEMs
-  Increase in Axle Load limit for commercial vehicles by 25%. This expanded freight capacity has led to shrinkage of new vehicle demand
-  Increase in vehicle cost due to Hon'ble Supreme Court's order for upfront collection of  long-term 3 rd party  insurance premium for 3 years (new cars) and 5 years (new two-wheelers)
-  Introduction of new safety and emission norms.

The  detail  of  sales  of  two-wheelers  and  tractors  during  the  last  three  years  is  as under:

| Domestic Sales   | 2017-18     | 2018-19     | 2019-20(till Jan 20)   |
|------------------|-------------|-------------|------------------------|
| Two-wheelers     | 2,02,00,117 | 2,11,81,390 | 1,52,55,979            |
| Tractor          | *           | 786,381     | 6,16,076               |

Source: SIAM& Tractor Manufacturers Association

The  Government  is  committed  to  support  and  further  encourage  the  auto  sector through  a  number  of  policy  interventions  like  reduction  in  corporate  tax,  increased budgetary outlay on infrastructure sector, increase in liquidity to financial institutions and linking of repo rate to interest charged on vehicle loans, reduction in GST for e vehicles and rebate in Income Tax etc.

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