No reports of reduction in auto manufacturing due to coronavirus spread: Prakash Javadekar

Radheshyam Jadhav Pune | Updated on March 19, 2020 Published on March 19, 2020

Union Minister Prakash Javdekar


The Ministry of Heavy Industries has said that there’s been no reduction in automobile production following spread of coronavirus.

In a written reply to a question in Lok Sabha on Tuesday on whether manufacturing in the auto industry is expected to be reduced by around 8.3 per cent due to the spread of coronavirus, Prakash Javadekar, Minister of Heavy Industries, said, “No such estimate of reduction in production has been reported.”

He added, “Government is taking all measures, as required, to contain the impact on industry. The government has recently issued a notification of force majeure for coronavirus and 24x7 clearance of shipments at all custom formations.”

However, in another answer, the Minister admitted that there are cyclical slowdowns across various sectors, including the automotive sector for the last few months. Interestingly, Javadekar echoed his counterpart Union Finance Minister Nirmala Sitharaman’s views that changing millennial preferences and cab aggregators may be among the reasons for this slowdown.

Sitharaman, in September last year, had said that the mindset of the millennials, who seem not inclined towards committing on EMIs towards buying an automobile, is among the factors influencing the automobile industry, which witnessed a major drop in sales.

Javadekar cited other reasons for the slowdown in the automotive industry, including BS-VI vehicle inventory adjustments by original equipment manufacturers (OEMs) and 25 per cent increase in axle load limit for commercial vehicles, which expanded freight capacity leading to shrinkage of new vehicle demand. Increase in vehicle cost due to the Supreme Court’s order for the upfront collection of long-term third-party insurance premium for three years (new cars) and five years (new two-wheelers) and introduction of new safety and emission norms are other reasons for the slowdown, according to the government.

“The government is committed to support and further encourage the auto sector through a number of policy interventions like reduction in corporate tax, increased budgetary outlay on infrastructure sector, increase in liquidity to financial institutions and linking of repo rate to interest charged on vehicle loans, reduction in GST for e-vehicles and rebate in Income Tax, etc,” the Minister added.

Sales of two-wheelers and tractors in last three years

Domestic Sales



2019-20 (till Jan 20)









*Data not available. Source: SIAM and Tractor Manufacturers Association as cited in Lok Sabha question answers dated March 17, 2020


Published on March 19, 2020
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