This, according to them, would contribute to an upturn in auto sales, especially in the passenger car and two-wheeler segment in the coming years.

Auto sales in India have been on the decline since the second half of FY19, when the bankruptcy of infrastructure leasing and financial services caused a liquidity crunch among non-bank financial companies that are among the major auto industry lenders.

Rising fuel prices, low consumer confidence in a slowing economy, and rising vehicle prices to meet new safety and emissions regulations have resulted in lower annual car sales over the past decade. ‘EX20.

The outbreak of the covid-19 pandemic pushed sales further in FY21, as sales and manufacturing operations halted until May due to a strict nationwide lockdown . The second wave of infections derailed a possible recovery in the first quarter of the current fiscal year.

According to RC Bhargava, auto sales declined before the outbreak of the covid-19 pandemic and few policy measures have been announced to stop the decline. New regulations such as BS 6 emission standards and higher state taxes have made cars unaffordable for entry-level customers.

“We have to take into account the economic situation of the Indian people. I don’t think the industry will revive, whether it’s internal combustion engines or electric, unless we tackle the issue of customer affordability, ”Bhargava said.

He added that new regulations like BS 6 have raised the prices of ??22,000 for entry-level cars like Altos and Wagon Rs, as well as taxes imposed by state governments.

Indian two-wheeler manufacturers have also urged the Union government to reduce the goods and services tax on entry-level two-wheelers to 18%, from the current 28%. Sales of entry-level two-wheelers have remained weak over the past two years due to the economic downturn and rising cost of ownership.

According to Venu Srinivasan, president of TVS Motor Company, the cost of owning a moped has increased 45 to 50 percent in recent years due to the transition to BS 6 standards, the addition of a anti-lock braking and 28% GST tax.

He further urged the government to develop policies to encourage the recycling of components such as lithium batteries and motors used in electric and combustion engines. The policy must take into account the carbon footprint of a product throughout its life cycle.