Increasing production, sales during festive season our focus right now, says SIAM

NEW DELHI: The auto sector’s priority right now is to fight coronavirus and increase production and sales to cater to the festive season demand, while other important matters like reduction in GST rate on two-wheelers could be taken up at a later stage, industry body SIAM said on Friday. “Right now, nationally and globally everybody is fighting the coronavirus. We will have to collaborate and integrate our effort to fight this pandemic. It is the priority right now,” Society of Indian Automobile Manufacturers (SIAM) President Kenichi Ayukawa told reporters.

He was responding to a query if the industry body has made another attempt in the hope of convincing the government to cut the GST rate on two-wheelers.

In August, Finance Minister Nirmala Sitharaman had said two-wheelers were neither a luxury nor sin goods and so merit a GST revision.

But in the August 27 GST Council meeting, nothing materialised and the tax rate remained the same.

Two-wheelers attract 28 per cent GST and the two-wheeler industry has been demanding to reduce it to 18 per cent.

Ayukawa said the priority for the industry right now was to increase production and sales in the festive season while meeting COVID-19 related safety protocols.

“So our focus is on that right now,” he noted.

On sales forecast, he said due to coronavirus nobody had a clear answer to that question.

“Need to see what happens after the festive season. We are hoping for a sustained demand going ahead,” Ayukawa said.

When asked about achieving 50 lakh sales target for passenger vehicles he said “that is our industry dream”.

“Under the current situation we have to focus on reality and how we can fight this pandemic. This is very important. I guess we will have to once again plan how to achieve volumes of 5 million, 7 million or 10 million,” Ayukawa said.

On enhanced inventory levels at dealers, he said it is the general exercise of increasing the stock at dealers before the festive season.

Ayukawa noted that rural demand has been good and now with festive season approaching the urban areas were also coming back.

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