[aargee]

A lot of people were anguished by the hike in registration fees. We have deferred the (hiked) registration fee till June 2020. In order to boost demand Government shall lift the ban of purchase of new vehicles to replace all old vehicles by government departments. Government will encourage replacement of old vehicles within government departments

Since inventories are piling on with car manufacturing companies an additional 15 percent depreciation on all vehicles to increase to 30 percent acquired during the period from now till March 31, 2020 will benefit from this

The automobile sector has been meeting us, both as an industry and also individually. I am glad to announce the response we have given to them in this matter. The BS-IV vehicles was a big issue. There was confusion because government wanted to make an announcement as regards encouraging electric vehicles and batteries. That confusion we want to dispel completely

BS-IV vehicles which are purchased up to March 31, 2020 will remain operational for their entire period of registration. It will not be that from 2020 BS-IV will be off the roads. As long as their registration is on they will be as good as any other vehicle

Tata Motors welcomes the comprehensive set of actions laid out by the government and believes measures to improve liquidity, drive growth and reduce cost of ownership of the vehicles, should help the industry get back on track. We thank the government for hearing the concerns of the industry empathetically and doing their best under current conditions

We welcome the firm measures announced by the Finance Minister today. The host of positive measures announced has given the much required boost to the auto sector and also sets a clear roadmap. We are confident that these measures once implemented, will support growth and drive demand for the auto sector

Source - https://www.moneycontrol.com/news/te...r-4366951.html

[Durango Dude]

When the consumer sentiment is down, what ever incentives are announced may not compensate for the economic reality that prevails. The Auto Makers have to bring back the VFM tag and feel good effect in their products instead of pricing it sky high. For example with the amount of money I bought a fully loaded Elantra some 13 years back would fetch me a top end Grand i10 Nios now. The more the ₹ tumbles the more happy the Govt is so that they're able to export at competitive prices just favoring a few who export but the rest of us have to live with the weak rupee and pay sky high taxes and also get less bang for buck. Stock market is another form of horse racing/gambling.

The buying power of the rupee has tumbled to abysmal depths and is yet to see the worst, with such a poor performing currency no point in giving more incentives. Best would be to open up the market and allow others to have a free run and cut burgeoning taxes and break down tariff walls around the already over protected local industries and allow capital account convertibility so that not only the corrupt politicians and industrialists but even the common man can decide in which currency he or she would keep his money. India isn't poor but we're made to live like rats because of our politicians. The gold reserves of India would easily outstrip any other country on earth.

[AWD]

Originally Posted by aargee

In order to boost demand Government shall lift the ban of purchase of new vehicles to replace all old vehicles by government departments. Government will encourage replacement of old vehicles within government departments

What sort of a solution is this! Waste Tax payers money to purchase more Govt. vehicles! This Govts. economic thinktank is not upto the task. If they wanted to replace or order new Govt. vehicles, they should have gone the EV way & set an example.

[PearlJam]

Originally Posted by AWD

BS-IV vehicles which are purchased up to March 31, 2020 will remain operational for their entire period of registration. It will not be that from 2020 BS-IV will be off the roads. As long as their registration is on they will be as good as any other vehicle

I never understood this. How was it before the announcement? If BS-IV vehicles would have been off roads from 2020, which customer would have bought even a single car?

[NaXal]

I guess if Niti Ayog didn't announced/proposed their disastrous plans, we wouldn't have this issue at first place.

Majority of the announcement is directly opposite of what Niti Ayog proposed or tried to push.

Starting with but not limited to,

1. Complete EV by 2025. Creating huge confusion with existing ICE fleet.

2. BS4 stopping by 2020 confusion with existing or would be owners about the future of their present or upcoming BS4 vehicles.

3. Govt departments were forced to stop procurement of ICE vehicles & that 10,000 EV procurement episode.

4. 15 fold increase of vehicle registration or re-registration fee.

Yes off course, there were other negative factors like such a huge burden of TAX (GST/duty/SES/Road TAX) and ever increasing insurance fee but nothing did more damage to the popular sentiment as what Niti Ayog & their proposals did.

Finance minister is right on her statement about the need of road infrastructure for growth of automobile sales but government seriously need to think & put a limit on % of TAX or insurance expenses in total cost of a vehicle. We are at almost 45% or even more on a new car on road price for these expenses. Ex.factory price of a new car is like 55% of the total on road price. And it's getting worst every year with new budget. I am no financial expert, but such practices aren't sustainable in any industry. Specially when an owner is getting slapped with more such tax on fuel plus ever increasing toll charges.

[prateekm]

In order to boost demand Government shall lift the ban of purchase of new vehicles to replace all old vehicles by government departments. Government will encourage replacement of old vehicles within government departments

Sorry, but I couldn't resist myself..

[V.Narayan]

If they shut down Niti A. who knows the GDP growth might lurch up 0.5% to 0.75% p.a. The Planning Commission was a sleepy bureaucracy to give employment to our Babus. But the Niti Aayog is a constantly chattering train wreck going some where to happen.

Mods: of this is too political please delete or edit.

[ZenMaster]

The biggest issue and a major reason for all this commotion is confusion and lack of confidence on the side of businesses as well as consumers.

Unfortunately, there is a huge difference between what is promised by the leader(s) of the govt., what is understood by the people, what the govt. Thinks they are implementing and what is actually implemented in the end. And also the govt. Of the day seem too unpredictable. They announce huge changes to old policies (often with good intentions) overnight with no heads-up to anyone as well as say a different opinion everyday on their stand regarding their own new policies.
This is the end causes too much confusion among the business community who does not know what step to take next lest the govt suddenly comes in with a new policy/law/increase in charges or whatever.
At the same time consumer confidence has gone thru the floor. Unlike us BHPians most people don't understand what the govt is thinking regarding BSVI. All they understand right now is that BS 6 cars might be too costly, BS4 vehicles will have bad resale value, the ever increasing RTO / registration charges, increasing premiums, bad infra and traffic jams, increasing price of fuel, (add to that frequent natural calamities&floods that destroy vehicles every year) and in the end might come to the conclusion - I don't think it's a good Time to buy a new car. Let's keep the old one for longer or use Uber etc.

[VKumar]

Originally Posted by V.Narayan

Niti Aayog is a constantly chattering train wreck going some where to happen.

Although they call it 'National Institution For Transforming India', but it looks like transformations are going all the way red. What I believe, is that, these people need to forget the complex economic machinery and conduct a 5 why analysis of themselves and their policies once. Who is responsible for this slowdown? Well, Government and the industry, both. Citizens want to live, buy and thrive - but they need to be assured of the future, talks of recession are in the air; how do the things come under control? No offense to anyone, but the policy making body, in itself requires an overhaul. The people going for the most elite government service, at times they want to do something for this country and bring about the change; they need to be freed from the handicap.

Government:

• They need to contain the costs of goods and services being produced. They are moving towards a $5 Trillion GDP in 2025, but don't want to get their own part right
• The biggest chunk of car buying population today is the one in their late twenties and early thirties, with average age of car buyer being around 35 to 37 these days. These people need to feel secure about their jobs - govt. needs to do something about that
• Education, ask any debt ridden guy who is working at 6-7 lpa and has a loan of 15-20 lac on him because of some fancy program. I know one, all he hopes is to get decent hikes, so that he can start living peacefully. Education is getting really expensive with time. Other than the elite category (which we luckily got blessed with), the fresh passed out students either have no jobs or are at times working for peanuts, with a loan to pay back. We can't expect them in the market any time sooner

Industry:

• They need to contain their greed, they have inflated the car prices to such an extent, that now they themselves don't know where to hide their faces if they announce a price cut
• Anyone remember the price cut Ecosport went through, or the S cross went through? They have shown us the reality of these black suited gentlemen, who come on the stage and talk about 'the power of dreams'!

[dragracer567]

The thing most people fail to understand is that this slowdown is global rather than being specific to India with various factors contributing such as the trade war and brexit (which is playing havoc on Tata motors' profit margins) which is combined with India's own problems such as bad debt that has made finance quite scarce for new car purchases. Some economic pundits are even of the opinion that we are limping into a global recession.

Whatever the government is doing right now is just a facade to keep the aam janta happy and optimistic while the global economy recovers (hopefully).

Moreover, we need reforms and we need it now, else the dream of being a $5 trillion economy by 2025 (which in itself isn't really too ambitious, it's 1/3rd of China's CURRENT economy) will remain what it is, a distant dream.

[sdp1975]

"BS-IV vehicles which are purchased up to March 31, 2020 will remain operational for their entire period of registration."

It's quite possible in the future that Parliament enacts a law scrapping BS-IV vehicles before registration expiry. This verbal commitment by the FM has zero legal value that I would not rely on while purchasing a car.

In the NCR, the Supreme court has already banned diesel vehicles older than 10 years while the registration period is 15 years, isn't the FM aware of this ?

[GeeTee TSI]

I recall the Cash for Clunkers and other scrappage policies rolled out in other countries in the past primarily to improve fuel efficiency and emissions. Can't the government do something similar to spurt growth but of BS VI or EVs and not the same repackaged, more expensive clunkers

[PearlJam]

Originally Posted by Durango Dude

Stock market is another form of horse racing/gambling.

In the very short term, yes. Otherwise, totally disagree. Stock market is an indispensable part of the economy.

The father of value investing, Benjamin Graham, explained this concept by saying that in the short run, the market is like a voting machine--tallying up which firms are popular and unpopular. But in the long run, the market is like a weighing machine--assessing the substance of a company.

Sorry for going off topic, but I wanted to correct this misconception

[rajvardhanraje]

The current slew of measures will not make a big impact in resurrecting the ailing automotive sector. There is much more that needs to be done from both sides. Unilaterally reviving this sector is not going to be possible for the government. The manufacturers also have to play their part to some extent. Although I agree in the current scenario, the onus is more on the government than the manufacturers. The registration fee hike is totally out of sync with the current market scenario.

My concern is that even if the government reduces the taxes on automobiles, we cannot guarantee that the benefits would be passed on to the customers in the long term. After a while the manufacturers are bound to increase prices which will effectively negate the tax rebates and the consumer will end up paying the same amount. The only difference would be that the manufacturers will benefit more at the cost of the government. A very tricky situation indeed for the government to be in.

[imidnightmare]

Very stop-gap and half-a**ed measures in my opinion. There are deep structural issues in the sector that won't go away just because government buys some new vehicles. First there is this absolute pipe-dream of "all electric" that the government has. I'm convinced it has about a 0.00% chance of success in even double the timeframe they're targeting. There are so many issues to resolve - and that have no answers even at the global level!

The uncertainty over how regulations will move isn't helping manufacturers. This too, at a time when the auto market is facing a slowdown globally! Add to that the appalling road and traffic conditions in most parts of the country and the absolutely pathetic value on offer. I can't (honestly) think of many cars that are a decent value proposition. Note that I'm not talking of "value for money" (I don't believe in the phrase) but of "value proposition". There is barely any car that offers a good blend of features without being absolutely extortionately priced.

The mechanisms put in place to protect domestic makers and ostensibly boost FDI aren't working. At all. If anything, they're counter-productive for consumers and finally, you can see it all coming to a head. Customers are getting smarter and with radio cabs and self-drive options, the "necessity" of ownership is vanishing.

Measures that would (probably) help:
1. Quick audit of whether GST benefits were actually passed to customers (not seen any sector where they were)
2. Lowering interest rates (this works for the full economy)
3. Lowering income tax rates (critical for the economy)
4. Make a clear automotive policy that makes sense and is absolutely not subject to change. Make a commitment to not flip-flop any more on the issues that matter.
- Stop the nonsense about all-EV by 2025/2030 (it's not sensible or possible)
- Make a commitment to the industry about how regulations will move, with timelines
- Make it clear that NGTs and Courts won't be able to step in ad hoc and play havoc with the above