A Covid-19-hit auto industry pitches for incentives to revive demand

At SIAM's 60th annual conclave, the industry body's president blamed the sales slump on an overdose of regulations, liquidity issues and a slowing economy

Auto industry leaders made a strong plea to the government to offer demand incentives to boost sales ahead of the festive season at (SIAM) Society of Indian Automobile Manufacturers’ 60th annual conclave titled Reviving Demand.

Submitting industry’s appeal to Prakash Javadekar, Minister of Heavy Industries and Public Enterprises—the guest of honor for the virtual event, Rajan Wadhera, President, SIAM said, “The industry has not been able to realise the investment it made in transition from BSIV to BSVI due to lack of consumer demand. Therefore, it’s not in a position to make further investment for new regulations.” These include CAFÉ (corporate average fuel efficiency and RDE (real driving emission) which are planned for year 2022 and 2023.

Javedkar conceded that the measures such as reduction in GST and scrappage incentive scheme will have to be implemented at the earliest. “The demand push has to be done immediately. The GST council will have to take into account the revenue impact and other factors. I hope you get some good news very soon,” he said.

The government, he added, is also in the process of finalising the export incentive scheme to make India a preferred export destination.

The industry, pointed out Wadhera, was on course to meet the target of additional job creation and contribution to the GDP envisaged as part of Automotive Mission Plan 2026, but the disruptions in the last three years and now the pandemic has pushed auto industry’s volume to where it was a decade back.  

He attributed the sales slump to an overdose of regulations, liquidity issues and slowing economy.