India’s auto industry says registration fee hike will hurt sales further

03, Aug. 2019

A Volkswagen dealership in Gurugram in the northern Indian state of Haryana.
A Volkswagen dealership in Gurugram in the northern Indian state of Haryana.

NEW DELHI, NNA – India’s auto industry has warned the government that its plan to raise the registration fee for new vehicles will dampen already slow sales.

“The automobile industry is going through an unprecedented downturn as sales of new vehicles have plummeted significantly over the last several months,” Society of Indian Automobile Manufacturers President Rajan Wadhera, said in a statement issued Wednesday.

A sharp increase in registration charges would “further aggravate” market conditions, he said. SIAM data show vehicle production and sales have been declining since December.

The Ministry of Road Transport and Highways last month proposed raising the registration fee for new passenger vehicles to 20,000 rupees ($287) from the current 1,000 rupees. The fee for new trucks and buses would also be raised to 20,000 rupees from 1,500 rupees, and registration of new motorbikes would rise to 1,000 rupees from 50 rupees.

The proposed hikes would hit the motorbike segment the most, likely increasing prices by 2.5 percent, followed by passenger cars and commercial vehicles with a 1 percent price gain, Nomura Securities International Inc. said in a report released Tuesday.