Union Finance Minister Nirmala Sitharaman on Tuesday blamed the “millenial mindset” of relying on ride-hailing services such as Uber and Ola instead of buying their own vehicles for the crisis in the Indian automobile sector, the Hindustan Times reported.
“The automobile and components industry has been affected by BS-VI and the mindsets of millennial, who now prefer to have Ola and Uber rather than committing to buying an automobile,” Sitharaman told reporters in New Delhi.
BS-VI, or Bharat Stage VI, is a strict emission norm set by the Centre to check pollution by vehicles that use combustion engines. Last year, the Supreme Court ruled Bharat Stage IV vehicles would not be sold from April 1, 2020. Instead, the BS-VI emission standards would come into force. In 2016, the Centre had announced the move to skip the BS-V norms and adopt BS-VI norms by 2020. The automobile industry is worried that the stricter standards would increase the cost of vehicles, especially diesel ones.
The Indian automobile industry is facing a crisis, with 15,000 jobs lost in the sector in the last quarter and almost 300 dealerships closed down in the last 18 months. The decline in consumer confidence, coupled with the crisis in non-banking finance companies, have caused a steep fall in passenger car sales.
Automobile sales declined for the 10th consecutive month in August as passenger vehicle sales fell 31.6% since the same month last year. This was the steepest decline in a month since the Society of Indian Automobile Manufacturers began compiling the data in 1997-’98.
On Monday, commercial vehicle manufacturer Ashok Leyland said seven of its facilities would have up to 18 non-working days this month because of continued weak demand for its products. Carmaker Maruti Suzuki last week decided to shut down operations at its plants in Gurugram and Manesar in Haryana on September 7 and September 9.
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