'Millennial Mindset' Of Using Ola, Uber Causing Automobile Slowdown: Nirmala Sitharaman

As trouble grows for India’s collapsing automobile sector, Union Finance Minister Nirmala Sitharaman has said that the ‘millennial mindset’ of preferring app-based cab hailing services such as Ola and Uber is also part of the bigger issue of unprecedented slump. Talking to media on Tuesday, Sitharaman elucidated her point by saying that the present day generation goes for such cab services instead of buying their own vehicles. This kind of behaviour is affecting the car sales in the country. "The automobile and components industry has been affected by BS6 and the mindsets of millennial, who now prefer to have Ola and Uber rather than committing to buying an automobile," Sitharaman was quoted as saying by Press Trust of India.

Domestic passenger vehicle sales skidded for the 10th consecutive month, falling from 287,198 units in August last year to 196,524 units last month and registering a 31.57 per cent decline.  Sales of commercial vehicles were down 38.71 per cent to 51,897 units in August, SIAM said. Vehicle sales across categories registered a decline of 23.55 per cent to 1,821,490 units from 2,382,436 units in August 2018, it added.

Also, motorcycle sales last month declined by 22.33 per cent to 9,37,486 units as compared to 12,07,005 units a year earlier. The total two-wheeler sales in August 2019 declined 22.24 per cent to 15,14,196 units compared to 19,47,304 units in the year-ago month.

Earlier, Union minister Nitin Gadkari had assured the crisis-hit automobile industry of all possible support from the government, including taking up the demand of GST reduction with finance minister Nirmala Sitharaman. Reiterating that the government would help the industry, the road transport and highways minister also said his ministry would give out 68 road projects worth up to Rs 5 lakh crore in the next three months to help generate demand for commercial vehicles. Sales of commercial vehicles were down 38.71 percent to 51,897 units in August, the SIAM added. However, according to the SIAM, overall automobile exports grew by 2 per cent.

The auto industry accounts for nearly half of India's manufacturing output and employs over 3.5 crore people directly and indirectly.

HIGHLIGHTS

• Young people prefer cabsinstead of buying their own vehicles, says minister.
• Domestic passenger vehicle sales skids for 10th consecutive month.
• Vehicle sales across categories registered a decline of 23.55%.