Never miss a story

Get subscribed to our newsletter


×
Not just reduced prices but even an expected up-tick in investment, courtesy the savings afforded by the tax sops, will aid the commercial vehicle segment. Pixabay

Lower automobile costs resulting from the recent tax sops announced to prop-up growth and reverse the economic slowdown, along with the upcoming festive season offers, have the potential to accelerate the sector’s sales, industry insiders said.

Market observers contended that reducing effective corporate tax rate to 25.17 per cent (inclusive of all cess and surcharges) from 30 per cent for all domestic companies will allow more auto firms to reduce prices.


At present, Maruti Suzuki has announced an immediate Rs 5,000 cut in the prices of its bestselling cars.

Besides, other companies such as Bajaj Auto, Piaggio India and Isuzu Motors India too have announced festive season discounts.

“Lower prices can increase demand incrementally, but cannot be expected to boost demand significantly,” Sridhar V., Partner at Grant Thornton India LLP, told IANS.

“Increase in liquidity will also help in increasing borrowings and thereby impacting buyers’ interest positively,” he added.

According to Fitch Ratings Associate Director Snehdeep Bohra: “Lower tax can help auto OEMs cut prices.

“But the overall scope for price reduction (as percentage of existing price) may not be very big in itself to spur demand… Improvement in sentiment and passing on of lower interest rates will be key.”

Not just reduced prices but even an expected up-tick in investment, courtesy the savings afforded by the tax sops, will aid the commercial vehicle segment.

“The effective corporate tax reduction is indeed a big supply side reform and should help spur investment cycle, which has been perpetually crippled,” Madhavi Arora, economist with Edelweiss Securities, told IANS.

“However, the supply side tax reforms generally have relatively long term economic returns, albeit impacting the revenue side in the near term,” Arora said.

At present, the automobile industry is suffering from a slowdown caused by several factors such as high GST rates, farm distress, stagnant wages and liquidity constraints.


The key sectors to benefit from GST rate cuts are hotels, gems & jewellery, defence and automobiles. Pixabay

The industry’s sales and production levels have dramatically plunged, leading to job losses. In August, all major Original Equipment Manufacturers (OEMs) comprising passenger, commercial, two and three-wheeler manufacturers have reported massive decline in domestic sales.

ALSO READ: Delhi NCR to Use Colour-Coded Stickers to Identify Nature of Fuel Used by Vehicles

As per the Society of Indian Automobile Manufacturers’ (SIAM) August sales figures, the overall sectoral offtake in the domestic market has plunged 23.55 per cent to 1,821,490 units, from 2,382,436 units sold during the corresponding month of the previous year.

Moreover, the industry has estimated that around 15,000 contractual manufacturing jobs have been lost and another million are at risk if the slowdown is not reversed. (IANS)


Popular

Photo by Diabetesmagazijn.nl on Unsplash

Eating fruits is one of the most satisfying ways to tackle sweet-tooth cravings while meeting your nutritional needs.

By Monika Manchanda

Eating fruits is one of the most satisfying ways to tackle sweet-tooth cravings while meeting your nutritional needs. Despite many studies and research on fruit consumption in diabetes, there are a lot of speculations on the right kind of fruit consumption and its relation to blood sugar levels.

Eating seasonal and locally available fruit has many health benefits ranging from reducing sugar and inflammation levels to fighting high blood pressure -- thanks to their abundant vitamins and mineral presence! They are a powerhouse of antioxidants like vitamins A, B, C, E, and minerals like iron, calcium, magnesium, and fiber.

The fruits listed below are not just diabetic-friendly but are loaded with fiber and water content which can slow down the sugar spikes and sugar absorption rate. Apples are not just nutritious and filling; According to a study, they are significantly associated with a lower risk of type 2 diabetes if consumed in moderation. Turns out there is a truth in the old saying, "An apple a day keeps the doctor away", after all!

red apples Apples are not just nutritious and filling; According to a study, they are significantly associated with a lower risk of type 2 diabetes if consumed in moderation. | Photo by Pierpaolo Riondato on Unsplash

Keep Reading Show less
Photo by Priscilla Du Preez on Unsplash

Your monthly round up of the latest lifestyle launches, from luxury indulgences to artisanal creations.

By Nimerta C Sharan

Your monthly round up of the latest lifestyle launches, from luxury indulgences to artisanal creations, here's what you can look forward to :

Bag This
Exciting news for all handbag lovers, luxury fashion house Louis Vuitton recently launched their limited edition handbags 'Artycapucines - Chapter 3'. Six internationally -- acclaimed artists have transformed the black canvas of the timeless Capucines bag into beautiful art pieces. Each bag will be available in a limited edition of 200 and will be released worldwide at the end of October 2021.

white leather shoulder bag on shopping cart Exciting news for all handbag lovers, luxury fashion house Louis Vuitton recently launched their limited edition handbags. | Photo by Erik Mclean on Unsplash

Keep Reading Show less
IANS

Actress Kangana Ranaut has talked about how her weight adjustments for her latest 'Thalaivii' that "messed up many things" in her body

Actress Kangana Ranaut has talked about how her weight adjustments for her latest 'Thalaivii' that "messed up many things" in her body and left her with "permanent stretch marks". For her role in the film, based on the life of late Tamil Nadu Chief Minister and former actress J. Jayalalithaa, Kangana had to gain 20kg and undergo major physical transformation several times.

She took to Instagram to share her experience, detailing that doing all that over the six months period left her with "permanent stretch marks". "Gaining 20 kgs in 6 months and loosing it all within 6 months that too in my thirties messed up many things in my bodya I also have permanent stretch marks as well but art comes to life with a price and more often than not price is the artist him/herself," she wrote.

"Thalaivii" showcases the varied aspects of Jayalalithaa's life, tracing her journey as an actress at a young age to becoming the face of Tamil cinema, as well as the rise of the revolutionary leader who changed the course of the state's politics. Talking about her upcoming works, Kangana currently has 'Dhaakad'.

She is also shooting for her next 'Tejas', where she plays a fighter pilot. The Indian Air Force was the first of the country's defence forces to induct women into combat roles in 2016. The film takes inspiration from the landmark event. 'Tejas' is directed by debutant Sarvesh Mewara. The film will be RSVP's second film which pays a tribute to the Indian military after the immensely successful film "Uri: The Surgical Strike" which was released in January 2019. (IANS/ MBI)


Keep reading... Show less