While talking to Times Drive, Manohar Bhat, Vice President and Head of Sales and Marketing, Kia Motors India, said that a temporary GST rate cut will be the most effective way to revive the automobile industry.
Kia Motors entered the Indian automobile industry last year and is already one of the largest automakers in the country. It’s first offering Seltos started ruling the sales charts soon after the launch and displaced Hyundai Creta as the best selling compact SUV. And then came in the Carnival luxury MPV which too has racked up substantial bookings. And up next, the South Korean carmaker is planning to enter the competitive sub-compact SUV segment in the country with Sonet.
However, the coronavirus outbreak has brought all carmakers into uncharted territory as the pandemic has created an unprecedented situation in the country. April saw absolutely no business on passenger vehicles front and even as automakers are now resuming operations, a quick turnover is not expected given that buying sentiment has been impacted. So, during this worrisome situation, the automobile industry needs a shot in the arm, which according to Kia is GST reduction. While talking to Times Drive, Manohar Bhat, Vice President and Head of Sales and Marketing, Kia Motors India, said that a temporary reduction in GST will be the most effective way to revive the automobile industry.
In fact, both SIAM (Society of Indian Automobile Manufacturers) and FADA (Federation of Automobile Dealers Associations ) have been consistently requesting the Indian government to bring down the GST rate on new vehicles from 28 percent to 18 percent for some duration. Doing this will substantially cut down the upfront cost of vehicles, thereby boosting sales. The demand for a temporary GST cut was raised several times last year by many automakers in order to counter the sales slowdown. And with the pandemic making situation worse, this measure is the need of the hour.
Manohar Bhat also appreciated the measures announced by the government to help MSMEs, including Indian automobile component makers. However, he noted that such companies will benefit only if there is a surge in demand for their products. To address this, the government should also introduce several demand stimulating measures, like an incentive-based vehicle scrappage policy besides reducing GST. And when asked about Kia Motors’ plans in the near future, Bhat mentioned that the company has resumed production at its Anantapur plant in Andhra Pradesh, albeit in a limited capacity. It is also working on launching a Sonet sub-compact SUV, which is likely to hit the markets by the festive season.