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Finance Minister Nirmala Sitharaman blames millennials for car sale slump, says they aren't buying cars

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Finance Minister Nirmala Sitharaman blames millennials for car sale slump, says they aren't buying cars

Finance Minister Nirmala Sitharaman today said that factors like the upcoming BS6 emission norms and preference of millennials for Ola and Uber over buying cars have affected the Indian automobile industry.

The overall domestic sales fell a record 23.55 per cent to 18,21,490 units in August 2019, the latest SIAM (Society of Indian Automobile Manufacturers) data has shown. The domestic sales of passenger vehicles declined for the tenth consecutive month with the numbers going down by a mammoth 31.57 per cent to 1,96,524 units in August 2019.

The government had recently announced several measures to bring some cheer in the automobile sector. As per the recent announcements, the BSIV vehicles purchased till March 31, 2020, will remain in operation for the entire period of registration. The implementation of the one-time registration fee has been deferred until June 2020. The vehicles acquired till March 31, 2020, will have 30 per cent depreciation. The ban on the purchase of new vehicles by the various government departments has been removed. Also, the government will consider a scrappage policy.

"The automobile industry is now affected by BS6 and the mindsets of millennial, who now prefer to have Ola or Uber rather than committing to buying an automobile," ANI quoted Sitharaman as saying.

The Finance Minister also said that the GST Council will take a decision on the demand of the auto industry to consider a reduction in tax rates. As of now, automobiles are in the 28 per cent tax bracket.

The total domestic passenger vehicle sales of the country's largest carmaker Maruti Suzuki India fell 36.1 per cent to 93,173 units in August 2019. In August 2018, the figure stood at 1,45,895 units. Hyundai Motor India's domestic sales dropped 16.58 per cent to 38,205 units in August 2019 from 45,801 units in August 2018.

Honda Cars India saw its monthly domestic sales plunging 51.3 per cent to 8,291 units in August 2019. The company had sold 17,020 units in the same month last year. The domestic passenger vehicle sales of Tata Motors have declined a massive 58 per cent to 7,316 units in August 2019 from 17,351 units in the same month last year.

Mahindra & Mahindra's total passenger vehicle sales touched a total of 13,507 units in the domestic market in August 2019. This was 32 per cent lower than 19,758 units disposed of by the company in August 2018.