1. Business

Over-regulation by govt killing auto industry, says Rajiv Bajaj; Budget must address ‘real issues’

Never the one to mince phrases, Bajaj Auto managing director Rajiv Bajaj on Tuesday hit out on the authorities for over regulation that he stated was killing the trade. The vehicle trade in 2019 endured its worst-ever efficiency in a yr in over twenty years with a close to 14 % decline in gross sales over 2018.

Bajaj stated the rise in value of a two wheeler by virtually 30 % within the final 18 months was a giant cause for the present slowdown and added that he didn’t count on the upcoming price range will have the ability to clear up the issues.

“If the real issues are addressed, only then can we see some chance. Addressing peripheral issues has never solved any problem,” Bajaj stated after the launch of the corporate’s first ever electrical automobile, Chetak. “The single most important reason for the current slide is over-regulation by the government. We are budget agnostic. The over-regulation is killing the industry.”

A host of regulatory adjustments within the home vehicle trade beginning with new security norms which has made options like ABS for 2 wheelers obligatory has led to a rise within the value of automobiles. Also, the change in insurance coverage norms that made third-party cowl obligatory for 2 wheelers for 5 years has additional raised costs. Added to that the changeover from BS IV to BS VI norms in April 2020 and the rising clamor for introducing electrical automobiles even when the infrastructure just isn’t able to assist mass adoption has solely added to the confusion.

“The price of owning a two-wheeler for a common man has increased by 30 percent in 1.5 years. That is a hard problem. Does the government have the humility to reflect and roll back some of this? Can they absorb some of the hit by BSVI?” Bajaj stated. “It will be politically incorrect to say that BSVI is not the right thing to do, but frankly, I’m going to say it. Getting rid of old vehicles in a suitable mechanism would have been more effective than squeezing out the last little bit of emission from BSIV vehicles.”

Sale of two wheelers, which types the largest chunk of home vehicle gross sales slumped 14 % in calendar yr 2019 at 18.57 million items towards 21.64 million in 2018. In the fiscal thus far (April-December 2019), gross sales are down practically 16 % at 13.91 million. Bajaj Auto’s personal gross sales additionally declined 13.25 % at 1.7 million items. Bajaj is nation’s fourth largest two wheeler producer behind Hero MotoCorp, Honda and TVS.

The trade has been asking for a discount in GST on cars from 28 to 18 % and whereas Bajaj agreed it will assist take up a few of the value that producers are pressured to go on to the shoppers, he remained uncertain if it will actually occur.

“I don’t think there is anything that the budget can do which can solve the industry’s problems. The budget was not the reason due to which the sales have been heading down,” he stated.

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