28 October, 2020

My Next Car Is A Bike!

After years, the automobile industry hits the skids. VAT, floods, high prices keep consumers hesitating on the kerb.

Atul Loke
My Next Car Is A Bike!
outlookindia.com
-0001-11-30T00:00:00+05:53
Just hours after Union finance minister P. Chidambaram presented his budget this year, the CEOs of auto majors showered praises on his rural thrust. It was seen as a major demand booster for the industry and we-will-continue-to-grow-come-what-may seemed to be the common refrain among the chieftains. They didn't even mind the fact that the FM refused to accede to their main demand—reduction in excise duty on passenger cars from 24 to 16 per cent, as was the levy on two-wheelers and commercial vehicles. Those were indeed the heady days for the country's carmakers. And why not? Until then, the car market had grown at a frenetic pace for almost four years without a brake, selling over a million vehicles in 2004-05.

How did the mindset change now? These days, the one issue that senior managers at car firms talk about is why it's critical for the FM to pare excise duty. For, it's the only way to bring back the much-needed zing into the auto sector. The reason: car sales have dropped for two consecutive months—June and July. The fall in July, compared to the same month in 2004,...
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