Bajaj Auto's managing director says new norms have necessitated prices increases, impacting demand. A vehicle scrappage policy would have helped revive demand.
14 Jan 2020 | 5806 Views | By Shahkar Abidi
The ongoing slowdown in the Indian automotive industry, which sees overall numbers down by 15.73% in April-December 2019, is primarily due to “over-regulation” by the government and the upcoming Union Budget 2020 is not going to help majorly either, said Rajiv Bajaj, managing director of Pune-based Bajaj Auto.
Speaking at ...
This is an Autocar Pro Plus article. Subscribe to continue reading.
The ongoing slowdown in the Indian automotive industry, which sees overall numbers down by 15.73% in April-December 2019, is primarily due to “over-regulation” by the government and the upcoming Union Budget 2020 is not going to help majorly either, said Rajiv Bajaj, managing director of Pune-based Bajaj Auto.
Speaking at the price unveiling event of the company’s first electric scooter Chetak today in Mumbai, Bajaj said that what has brought the industry to such a situation is overregulation by the government. Citing the examples of increased insurance cost, introduction of new safety norms, and leapfrogging emission norms to BS VI in a short timeframe, Bajaj 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 impacted market demand.
Asked to comment on his expectations from the upcoming Union Budget 2020, Bajaj said that his company sells its products not just in India but also in several other countries. “We are therefore Budget-agnostic,” remarked Bajaj, emphasising that Budget is never the problem and he does not have expectations from it.
Bajaj, who is 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 more 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 are down 15.80 percent to 13,914,974 units, with scooters down 16.16 percent (4,463,954) and motorcycles down 15.04 percent (8,955,215) and mopeds down 25.10 percent (495,805).