When Honorable Finance Minister Nirmala Sitharaman announced measures to tackle the rapidly declining auto sector at a press conference yesterday, auto companies together felt deep sighs of relief. The various measures announced will benefit both automobile manufacturers as well as customers.
It has been a terrible period in the history of automobile sector since past many months. A lot of confusion that prevailed about the future of passenger vehicles with conventional combustion engine over electric models had led to sharp decline in the sales of the former. The measures that were announced for the economy revival has now helped clear all the confusions, thanks to the FM.
Here are the highlights of the press conference regarding the Automobile Sector:
• BS-IV vehicles purchased until March 31st,2020 will be allowed to be operational until their full period of registration.
• Revision/Hike of one-time registration fees of vehicles will be deferred until June 2020.
• Ban on new vehicle purchases to replace old vehicles by Government Departments removed. The purchase of new vehicles to replace old ones in these departments will also be encouraged by the government.
• Higher depreciation by an additional 15%, amounting to overall 30% for all vehicles acquired during the period starting now up till March 31,2020.
• The government is also considering plans for a scrappage policy soon to remove worn out vehicles from the roads.
• Electric vehicles and Internal Combustion Engine vehicles will continue to be registered.
• The government will be focusing on setting up of infrastructure for developing ancillaries/components that also includes batteries for export.
For past many months, this industry had been struggling hard to make it up the graph. Many companies had even offered huge discounts and offers to lure customers into purchases, but all efforts ended up in vain. As a result, this period also witnessed massive layoffs and wagecuts to manage the loss; as many as 15000 workers lost their jobs. Now, the various measures announced by the FM in the press conference conducted yesterday brings back hopes of revival in the auto sector.