Auto industry downturn is worrisome: SIAM

"The Commercial Vehicle and Two wheeler sales are also significantly negative indicating that the market has still not responded to the various measures initiated by the Hon’ble Finance Minister last month," he said.

"The series of announcements on credit availability and reducing the cost of credit that were made do not seem to have percolated down to the NBFCs which support the bulk of finance for the automotive industry. The consumer sentiment also continues to be low and there is clearly a trust deficit in lending money to the dealers," he said.

He said; "All this while, the Industry has pulled out all stops in offering attractive deals and discounts to the consumers. "

He said the government should consider reducing  GST rates from 28 percent to 18 percent on cars.

Rajan Wadhera said the move will significantly reduce the cost of vehicles and in turn create demand.

"There is also an urgent need to come out with an integrated Incentive based Scrappage policy covering all segments of the Auto Industry as promised by the Hon’ble Finance Minister," he said.

"As the festival season is around the corner, it is imperative that these decisions are taken quickly and announced without delay so that the industry could hope for a better festival season that could harbinger a recovery in the industry, "emphasised Rajan Wadhera.