New Delhi, Sep 6 (KNN) There is an urgent need to come out with an integrated Incentive based Scrappage policy covering all segments of the Auto Industry as promised by the Finance Minister Nirmala Sitharaman, said Rajan Wadhera, President of Society Indian Automobile Manufacturers (SIAM).

As the festival season is around the corner, it is imperative that these decisions are taken quickly and announced without delay so that the industry could hope for a better festival season that could harbinger a recovery in the industry, emphasized Wadhera.

He said that the sales report coming out from various companies for the month of August 2019 has been very dismal with over 30% erosion of sales for Passenger Vehicles.

The Commercial Vehicle and Two wheeler sales are also significantly negative indicating that the market has still not responded to the various measures initiated by the Finance Minister last month, he added.

The series of announcements on credit availability and reducing the cost of credit that were made do not seem to have percolated down to the NBFCs which support the bulk of finance for the automotive industry, said Wadhera.

He said “The consumer sentiment also continues to be low and there is clearly a trust deficit in lending money to the dealers.”

All this while, the Industry has pulled out all stops in offering attractive deals and discounts to the consumers. However, the ability of the industry to provide large discounts is limited and this only highlights the need for Government to consider reducing the GST rates from 28% to 18% which would significantly reduce the cost of vehicles and in turn create demand, Wadhera pointed.