Stats Puncture Nirmala's Auto Slump Theory

FM’s Claim negated by falling ridership in Ola & Uber, not many new vehicles being added to fleet, higher cost per km

- Sumant Banerji

Facts, numbers and economics… they all belie finance Minister Nirmala Sitharaman’s unique — if not bizarre — explanation to the slowdown in the country's automobile sector.

She blamed the proliferation of cab aggregators like Ola and Uber and the change in the mindset of millennials who prefer to use them instead of buying cars for the decline in sales.

“The automobile and components industry has been affected by BS6 (emission norms) and the mindsets of millennial, who now prefer to have Ola and Uber rather than committing to buy an automobile," she said in Chennai on Tuesday.

This has set the cat among the pigeons as the industry saw in the statement an excuse for not slashing excise duties to prop up sales —something the government has been hinting at for a week at least.

For one, sales to all cab companies account for between 8-10 per cent of overall passenger vehicle sales across companies. Sales to the entire taxi segment at Maruti, India's largest carmaker, are between 5-6 per cent and it has not changed in the last one year, implying that sales to cab aggregators have fallen in proportion to the decline in overall car sales. At Hyundai, it is at 3 per cent.