Slowdown Blues: Auto industry unanimous on its demand for GST cut to 18%, says SIAM

The auto industry says all stakeholders have unanimously sought a reduction in Goods and Services Tax (GST) to 18 per cent from 28 per cent due to a major slowdown in the sector. Rajan Wadhera, President, Society of Indian Automobile Manufacturers (SIAM), said there's an urgent need for the GST reduction to 18 per cent. "Need for an immediate reduction in the GST rates has been agreed unanimously by all automobile manufacturers, including the two-wheeler OEMs. This was also reiterated at a recent meeting with the finance minister where all OEMs (original equipment manufacturers) participated," a SIAM statement said. Pawan Munjal, Hero MotoCorp Chairman, also apprised Finance Minister Nirmala Sitharaman about the urgent need to revive the sector, the statement added. SIAM, a non-profit body, represents all major vehicle and vehicular engine manufacturers in India.

Society of Indian Automobile Manufacturers (SIAM) President Rajan Wadhera and Auto industry leaders ask the govt for a stimulus package, including #GST reduction on vehicles.

- All India Radio News (@airnewsalerts) August 7, 2019

Around two lakh jobs have been cut across automobile dealerships in India in the last three months as vehicle retailers take the last resort of cutting manpower to tide over the impact of the unprecedented sales slump, according to industry body Federation of Automobile Dealers Associations (FADA). With no immediate signs of recovery, the FADA feared the job cuts may continue with more showrooms being shut in the near future. It has sought immediate government intervention to provide relief to the auto industry.

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"The majority of job cuts have happened in the last three months. It started around May and continued through June and July," FADA President Ashish Harsharaj Kale said. Passenger vehicles (PV) segment has been the worst hit with sales continuing to decline for almost a year now. In July, market leader Maruti Suzuki reported a 36.3 per cent drop in its domestic PV wholesales, while Hyundai saw a dip of 10 per cent. M&M sales were down 16 per cent, Tata Motors PV sales fell 31 per cent while that of Honda Cars India Ltd (HCIL) also came down 48.67 per cent during the month.

Edited by Manoj Sharma

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