The Indian auto industry, which is already reeling under pressure, is unlikely to revive in the short term if the affordability factor is not addressed, RC Bhargava, Chairman, Maruti Suzuki India said, while addressing the 61st edition of SIAM’s annual convention.
He highlighted that due to high taxes on automobiles and increasing cost due to regulations the auto sector will not revive be it electric vehicles, CNGs or ICE. He argued that if we as a nation try to match the standards of Europe for safety and emissions, then automakers will not be able to make vehicles affordable in India.
The auto sector has been recognised as the major contributor, but very few steps have been taken to reverse the trend of slowdown, Bhargava added.
Electric vehicles too won’t become affordable till the EV penetration doesn’t grow in India. “We need to make a million cars to do that, which is not very likely in the near future,” he said.
Echoing Bhargava’s views, Vipin Sondhi, MD and CEO, Ashok Leyland said India is the highest taxed country among major automotive markets around the globe. The Indian Auto sector is undergoing a deep structural slowdown.
It is noteworthy that the auto sector contributes 6.4% of India’s GDP, 50% of India's GST collection and gives direct & indirect employment to 3.75 cr people.