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EV push slowing down demand for petrol, diesel cars: Auto cos to FM

EV push slowing down demand for petrol, diesel cars: Auto cos to FM

New Delhi:

The beleaguered auto industry met FM Nirmala Sitharaman on Wednesday and said too much focus on electric vehicles (EVs) — pushed aggressively by NITI Aayog — is distracting buyers from petrol and diesel vehicles at a time when companies are struggling to generate demand.

The industry, which was represented by Maruti chairman R C Bhargava, Hero Moto chairman Pawan Munjal, Mahindra automotive president Rajan Wadhera and functionaries from dealership and component associations, requested for a reduction in GST rates on vehicles, while asking for easier credit/liquidity availability.

Sitharaman, who was accompanied by top officials in the finance ministry and also those from the ministry of road transport and heavy industries, did not promise any immediate bailout. Although she gave a patient hearing to the industry honchos, sources told TOI.

At the meeting, Maruti chairman Bhargava said that increased focus on electrics is keeping buyers away. With a perception that affordable EVs are around the corner, people are holding back purchases of petrol and diesel cars. He said while electrics are still in their infancy, their growth should not be linked to decline of existing petrol and diesel models. NITI Aayog CEO Amitabh Kant, however, said their aggressive positioning currently is towards electric two-wheelers and three-wheelers, and not so much on cars.

Hero’s Munjal said the government should also look at introducing a scrappage policy to retire old and dilapidated two-wheelers from the roads so that new and cleaner vehicles can come in.

The auto industry is passing through its worst slowdown ever, and demand has been negative across product categories — cars and SUVs, twowheelers, three-wheelers and commercial vehicles. The slowdown has forced companies such as Maruti Suzuki, Honda Cars, Hero Moto, Tata Motors, and Honda two-wheelers to cut production and even go in for laying off contractual workers.

The industry said a stimulus package is urgently required.