Mahindra and Mahindra (M&M) Managing Director Pawan Goenka said on Tuesday that there was a sign of revival in the automobile sector, and the coming festive season will be "decisive".
"The automobile sector was sluggish since the last 12 months. But with the Centre's slew of measures to give a fillip to economy since 6 July, we are seeing the sluggishness giving way to positivity," Goenka told reporters in Indore, a PTI report said/
There was a hope for a revival of the automobile market with the onset of Navratra (Durga Puja) following good rainfall in large parts of the country and improvement in banks' finances,
"The six-week festive season starting with Navratra is going to be decisive. If the sale remains encouraging, the automobile sector will gather pace," Goenka said.
Asked about the automobile industry's demand of reduction in Goods and Services Tax (GST), Goenka said, "It was easy for us to make such a demand, but for the government to keep its financial position steady, it has to strike a balance. The government has brought down the corporate tax in a short duration, bringing delight to industry, which no one expected," he said.
"People's desire to buy new cars has not dampened. But I am bit concerned over the heavy vehicle truck segment, which has been hit hard. This segment relies on the transportation sector which would gain pace when the economy flourishes," he added.
M&M has started exporting electric two-wheelers to Europe from its plant in Madhya Pradesh's Pithampur Industrial Area near Indore, he said, the PTI report added.
Last Friday, Nirmala Sitharaman announced a corporate tax rate cut for manufacturers. Goenka was asked in an interview on CNBC-TV18 if carmakers would be passing the benefit of lower taxes to the consumer despite plunging sales and the upcoming festival season when sales traditionally see a boost. Transferring the entirety of tax benefit to the consumer will amount to a mere Rs 3,000 discount on a vehicle priced at Rs 8 lakh. Therefore, there isn’t much of a benefit to pass to the consumer, he said in the interview.
He said Mahindra and Mahindra will be offering festive season discount though.
--With PTI inputs
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Updated Date: Sep 25, 2019 07:34:50 IST