Cars get­ting ex­pen­sive, un­af­ford­able: Bhar­gava

Tem­po­rary GST Cut Won’t Help: Maruti Chief

The Times of India (New Delhi edition) - - Times Global - Times­ Pas­sen­ger Ve­hi­cles Com­mer­cial Ve­hi­cles Three­wheel­ers Twowheel­ers

New Delhi: A “paral­y­sis of de­ci­sion-mak­ing” in the bank­ing sec­tor and man­date to in­tro­duce safety fea­tures such as air bags and ABS on new cars have made them costlier and out of the reach of the twowheeler rider, Maruti chair­man R C Bhar­gava has said, em­pha­sis­ing that en­try-level four-wheel­ers have be­come un­af­ford­able to buy and main­tain for the com­mon man.

At a time when auto sales have crashed to his­toric lows, Bhar­gava also blamed higher taxes on petrol and diesel and up­ward re­vi­sion in road and reg­is­tra­tion charges by state gov­ern­ments for adding to the burden of car buy­ers. He added that a tem­po­rary cut in GST will not make much of a dif­fer­ence, and can be avoided.

Bhar­gava’s views on GST con­flicts with the de­mand made re­peat­edly by auto in­dus­try body Siam and other CEOs, who have pe­ti­tioned the govern­ment to bring down tax on ve­hi­cles from 28% to 18%. “The guy who rides a two-wheeler wants to up­grade to a four-wheeler. But he’s un­able to do so in terms of his fi­nan­cial ca­pac­ity,” the Maruti chair­man told TOI in an in­ter­view, while point­ing out sales of Alto have crashed 50%.

Bhar­gava re­fused to buy ar­gu­ments that the present slow­down in the auto sec­tor — where sales have touched low­est in two decades — is re­lated to “struc­tural shifts” such as the ris­ing pop­u­lar­ity of shared mo­bil­ity such as Ola and Uber. Rather, it is due to a num­ber of fac­tors, such as stricter




safety and emis­sion norms, en­hanced in­sur­ance costs, and ad­di­tional road tax in around nine states, which have de­pressed the sen­ti­ment.

The cu­mu­la­tive ef­fect of the fac­tors has in­creased the cost of an en­try car by around Rs 55,000, in­clud­ing around Rs 20,000 through higher road tax

Pas­sen­ger ve­hi­cle sales dip for 10 months in a row, P 20

in cer­tain states, Bhar­gava said. And, the big­gest is­sue is re­luc­tance of the bank­ing sec­tor where of­fi­cers are “very shy of tak­ing the slight­est risk” in terms of fi­nanc­ing.

Bhar­gava said stip­u­lat­ing ad­di­tional safety norms, which are pre­scribed in the de­vel­oped coun­tries, has no prac­ti­cal logic

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