Supportive approach by banks to the suppliers and dealers, GST concessions and re-look at the registration fees which have gone up very substantially should revive the auto sector, according to Anand Mahindra, Chairman, Mahindra & Mahindra.

“The auto industry contributes revenues upwards of ₹180,000 crore to the government treasuries. The paradox is that while the government needs to be lauded for its fiscal responsibility, the current slowdown in the auto industry poses a greater threat to the financial arithmetic. According to SIAM estimates, the slowdown has resulted in an 8 per cent loss in GST collection in the first 6 months of 2019. To catch up with the FY19 GST collections, the auto industry will need to grow at a rate of at least 7 per cent in the remaining 8 months of the FY20. I do believe that kick starting the auto industry with a few short-term measures will serve a greater national purpose,” Mahindra said at the company’s Annual General Meeting in Mumbai on Wednesday.

Mahindra said there is a tectonic shift occurring in the industry with the move towards electric vehicles. “The question therefore is not whether we should move to EVs, but how? The key to creating a win-win situation is to handle the transition in a way that produces the least amount of collateral damage,” he said.

On the resource side, Mahindra said there is need to support both wholesale and retail financing. “On this front, I think all the right steps are being taken. The rate cuts necessary for revival have been put in place and the future looks brighter for our stressed NBFCs. I am confident that these measures will bear fruit, creating greater liquidity for NBFCs which will ultimately make its way into the hands of the consumer. I would appeal to lenders to take a more supportive approach to the suppliers and dealers, who are the backbone of the auto ecosystem.”

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