Finance Minister Nirmala Sitharaman feels that the change is the mindset of millennials preferring ride-hailing services like Ola and Uber is also a contributor to the slowdown in the automotive industry. On Tuesday, Sitharaman said that automobile industry did have its "good times" till two years ago when it saw good upward trajectory. The minister said that the automotive industry has been affected by several things.
The minister reasoned that the slowdown is contributed due to many factors like the transition to stricter BS6 emission norms, registration-related matters and the mindset of millennials who seem to prefer to use app-based car-hailing services or using the Metro as studies have indicated that millennials prefer not to commit to EMIs towards owning a vehicle.
"So, a whole lot of factors are influencing the automobile sector. We are all seized of the problem. we will try to solve it", she said.
The BS6 norms are expected to be enforced from April 1, 2020, throughout the country. Currently, many manufacturers like Maruti Suzuki, Hyundai, Kia, Mercedes-Benz are already launching vehicles with BS6 ready engines which will need an update to the vehicle’s software to be able to run to BS6 standards which will be done when the vehicle is serviced once the BS6 grade fuel is available through the country.
On August 23, Sitharaman has announced the lift of the ban on the purchase of vehicles by government departments in addition to 15% depreciation on vehicles acquired from now till March 2020. The minister also confirmed that BS4 vehicles purchased up to March 2020 would remain operational for the full duration of registration. The government is also evaluating other measures like a vehicle crapping policy in order to boost demand.