Hope budget focuses on reducing GST on PVs: OLX VP Auto

Hope budget focuses on reducing GST on PVs: OLX VP Auto

Sunny Kataria, VP Auto, OLX India.

By Sunny Kataria

Given the ongoing tumultuous times for the automobile industry, I expect the industry to kickstart recovery by the mid of FY 21 in order to adjust to the market reaction towards the transition to the BS6 transmission norms. Hopefully, the budget will focus on reducing the GST from 28% to 18% for passenger vehicles- a long pending demand from the industry, a clear incentive structure for the scrappage of old cars and most importantly, an economic stimulus to lift the morale of the industry. 

OEM's will look to spruce up sales of older BS 4 models before the 31st March deadline and seek to make BS 6 models more affordable for the consumer as prices of new passenger vehicles will increase by 5-10% owing to the transition.

This, in turn, would augur well for the pre-owned car market in 2020 since this would lead to a fresh supply of cars in the pre-owned car market owing to the price differential between BS 4 and BS 6 cars. The anticipated increased supply to the pre-owned-car market due to the ongoing liquidation of BS-4 cars will also help bridge the gap between the higher demand and insufficient supply for cars

(The writer is the VP Auto of OLX India)