The ongoing slowdown in the Indian automotive industry sees overall numbers down by 15.73 percent in April-December 2019. Rajiv Bajaj, managing director of Pune-based Bajaj Auto says that this slowdown is primarily due to “over-regulation” by the Indian Government – and that the upcoming Union Budget 2020 is not going to help majorly, either.
Making this statement at the price-unveiling event of the company’s first electric scooter, the Chetak, in Mumbai today, Bajaj cited the examples of increased insurance costs, introduction of new safety norms, and leapfrogging emission norms to BS6 in a short time frame. He added that the cumulative effect of all this has been a substantial increase in vehicle prices within a short period of about 18 months, which has subsequently had an impact on market demand.
Asked to comment on his expectations from the upcoming Union Budget, Bajaj said that his company sells its products not just in India, but also in several other countries. “We are therefore Budget-agnostic,” he remarked, emphasising that the Budget is never a problem and he does not have any expectations from it.
Bajaj, who is one amongst the few outspoken corporate heads in India, added that getting rid of old vehicles through a suitable mechanism – like a scrappage policy – would have been effective in creating new demand.
As per industry estimates, two-wheeler industry volumes are likely to contract by about 8-10 percent in FY2020 with some moderation in decline in H2. In the April-December 2019 period, total numbers were down 15.80 percent, to 1,39,14,974 units, with scooters down 16.16 percent (44,63,954), motorcycles down 15.04 percent (89,55,215) and mopeds down 25.10 percent (4,95,805).