Cars getting expensive, unaffordable: Bhargava
Temporary GST Cut Won’t Help: Maruti Chief
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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