Electric two-wheeler sales dip on subsidy withdrawal

After getting off to a promising start, electric two-wheeler dealers in Chandigarh are finding it increasingly difficult to expand sales on account of withdrawal of the subsidy by the Chandigarh administration and high VAT of 12.5 per cent.

“Our sales have been hit by 15-25 per cent on account of scrapping of the subsidy. Earlier, we used to sell at least 60 vehicles per month, which has now been reduced to 50 vehicles per month after withdrawal of the subsidy,” said Vineet Aggarwal, managing director of Rattan Motors, an authorised dealer of Hero Electric, a 100-per cent electric two-wheeler manufacturing arm of the Hero Group.

Aggarwal urged the government to reintroduce subsidy and bring the VAT rate to 4 per cent from 12.5 per cent at present.

Echoing similar sentiments is an official of Yo Bikes’ authorised dealer Ganesh Automobiles, who maintained that sales have been affected by 20 per cent to 25 per cent due to withdrawal of subsidy. “The cuts in petrol prices announced in December 2008 and February 2009 have acted as a dampener in sales and the withdrawal of subsidy by the Chandigarh administration on electric two-wheelers is a big blow for the dealers and manufacturers,” he said.