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Thursday 9 April 2020

Maruti-Suzuki takes exception to remark by Sitharaman

Nirmala Sitharaman had recently blamed taxi aggregator companies like Ola and Uber for sluggishness in the auto sector, but the country's largest car-maker Maruti Suzuki India has taken exception to the comment

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Guwahati: Union Finance Minister Nirmala Sitharaman had recently blamed taxi aggregator companies like Ola and Uber for sluggishness in the auto sector, but the country’s largest car-maker Maruti Suzuki India has taken exception to the comment. The company said that these cab companies had been around for the past six or seven years, but the slowdown had reached a critical condition in the last few months.

“Ola and Uber came into existence during the last six-seven years. In this period, the auto industry also saw some of its best times. So, what happened only during the last few months that the downturn became so severe? I do not think it is only because of Ola and Uber,” Shashank Srivastava, executive director (marketing and sales), Maruti Suzuki India, said. He added that there was no change in every Indian’s desire to own a car. He said people bought cars for various reasons not limited to mobility.

Srivastava cited the US market which has seen a robust auto sector in spite of Uber which is a big player there. “In India, 46% of car buyers are first-time users. It is an aspirational behaviour. People may use public transport like Ola and Uber to go to offices on weekdays, but still they buy a vehicle for the weekend outings with the family,” the Maruti-Suzuki executive director said.

Sitharaman had said on Tuesday that the new generation now preferred to take taxis instead of paying EMI. According to her, this trend was the reason for the slowdown in the auto sector.

The auto industry is going through a tough time. The monthly passenger vehicle and car sales record saw the steepest fall in August. Passenger vehicle sales plunged 31.57% year-on-year to 196,524 units in August while passenger car sales fell 41.09% to 115,957 units. This is the worst-ever fall for both the categories since the Society of Indian Automobile Manufacturers (SIAM) started recording the data in 1997-98.

August was the tenth straight month that witnessed a fall in car sales. Truck and bus sales dropped 39% while two-wheeler sales fell 22% to 1.5 million units, neither of which can be attributed to the increasing popularity of taxi aggregator services.

According to the Society of Indian Automobile Manufacturers (SIAM), domestic sales of vehicles declined by 23.55% to 18,21,490 units in August. The figure stood at 23,82,436 units in August last year.

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