{"id":128783,"date":"2021-08-26T20:42:39","date_gmt":"2021-08-26T15:12:39","guid":{"rendered":"https:\/\/blog.forumias.com\/?p=128783"},"modified":"2021-08-26T20:42:39","modified_gmt":"2021-08-26T15:12:39","slug":"auto-firms-want-policy-shift-to-make-vehicles-affordable","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/auto-firms-want-policy-shift-to-make-vehicles-affordable\/","title":{"rendered":"Auto firms want policy shift to make vehicles affordable"},"content":{"rendered":"

Source<\/strong>: Livemint<\/a><\/span><\/p>\n

What is the news?<\/strong><\/h5>\n

India\u2019s automobile industry recently asked the government to frame policies that would make vehicle purchases more affordable for customers<\/strong> to revive sales. India\u2019s two-wheeler makers have also been urging the Union government to reduce goods and services tax (GST) imposed on entry-level two-wheelers to 18% from the existing 28%.<\/p>\n

Reason\u00a0<\/strong><\/h5>\n

Sales of entry-level two-wheelers have remained low due to an economic slowdown and increase in ownership cost.<\/strong><\/p>\n

Hence, the industry requested the govt for policies that would help recovery in sales, especially of passenger cars and two-wheelers.<\/p>\n

Present scenario<\/strong><\/h5>\n
    \n
  1. First, automobile sales in India have been on the downtrend since the second half of FY19 <\/strong>when the bankruptcy<\/strong> of Infrastructure Leasing and Financial Services caused a liquidity crisis among non-banking financial companies (NBFCs).<\/li>\n
  2. Second, higher fuel prices, weak consumer sentiment<\/strong> and an increase in vehicle prices to meet new regulations on safety and emissions led to a decline in car sales in FY20.<\/li>\n
  3. Third, the outbreak of the pandemic<\/strong> led to another double-digit decline in sales in FY21 as sales and manufacturing operations came to a halt due to a strict nationwide lockdown<\/strong>. The second covid wave also derailed a possible recovery.<\/li>\n
  4. Fourth, adequate policy measures have not been announced<\/strong> to arrest the decline.<\/li>\n
  5. Fifth, new regulations such as Bharat Stage VI (BS-VI)<\/strong> emission norms and higher taxes imposed by states have made entry-level cars unaffordable<\/strong> for buyers. This coupled with taxes imposed by states have made the increase substantial for a price-sensitive customer.<\/li>\n<\/ol>\n

    Conclusion<\/strong><\/p>\n

    The need is to come up with policy support to encourage<\/strong> the recycling of components such as lithium batteries and motors used in electric and combustion engine vehicles. The policies should take into account the carbon footprint<\/strong> of a product in its entire lifecycle.<\/p>\n

    Terms to know<\/strong>:<\/p>\n