News

What’s causing auto industry slowdown? Millennials, among other things: FM Sitharaman

Millennials have not taken kindly to the Finance Minister’s response.
What’s causing auto industry slowdown? Millennials, among other things: FM Sitharaman
What’s causing auto industry slowdown? Millennials, among other things: FM Sitharaman
Written by:
Shilpa S Ranipeta

Who is to blame for the current slowdown in the automobile industry? Millennials, according to Finance Minister Nirmala Sitharaman. Speaking at a press conference in Chennai, Sitharaman said that the slowdown is due to the mindset of millennials who take Olas and Ubers and don’t want to commit to EMIs.

“This sector (automobile) in particular, has been affected by several things such as the BS-VI movement, registration fee matter…and the mindset of millennials. Some studies show that millennials prefer not to commit to an EMI and instead prefer having Ola or Uber or taking the metro. So, a whole lot of factors are influencing it,” she said, in response to a question from the media. The Union Minister was addressing the media on the achievements of 100 days of Modi 2.0 when she was asked about the current slowdown that the automobile industry is facing.

The automobile sector in the country is facing the biggest slowdown in sales in nearly two decades, with sales continuously falling for the past nine quarters. The industry saw a 12.25% decline in production in April-August 2019 compared to last year.

Domestic sales of passenger vehicles fell 31.6% in August 2019, compared to the same period last year.

From Tata Motors to Mahindra and Ashok Leyland, several companies have announced non-working days in plants amid low demand. Over 3.5 lakh people have reportedly lost jobs as smaller component makers have begun shutting shop.

While the Finance Minister did not give any clarity on what the Centre is doing to address the slowdown, she said that the government is talking to the industry to see how best it can help them.

And it’s not just the automobile sector, from textile to FMCG, most industries in the country are facing a massive slowdown. India saw the lowest GDP growth of 5% in six years in Q1. This is down from a GDP growth of 8.2% in the first quarter of the previous financial year.

However, according to Sitharaman, dips and raises in GDP growth happen as part of growth.

“It is useful for us to remember that dips and raises in GDP growth happens. I’m not underestimating it and we are not sitting without responding to it. But it does happen and I’m not going to harp on times it had happened earlier. It’s part of growth. It does dip sometimes, grow sometimes. Now we are focused to see how it can grow in the next quarter,” she said.

Social media users, meanwhile, are not too happy with the Minister’s statement. 

Auto Slowdown

Related Stories

No stories found.
The News Minute
www.thenewsminute.com