Budget 2020 Wishlist: Here are the key challenges for automobile sector

Sector snapshot

The FY20 year-to-date (April to December) domestic sales volumes in all vehicular segments witnessed a sharp decline with passenger vehicles and commercial vehicles  reporting 16% and 21% drop, respectively. The key reason is subdued customer demand due to liquidity crunch and higher cost of finance and insurance. Like the last quarter, firms will focus across its value chain to ensure smooth transition to BS-VI.

Key challenges

Higher upfront cost: Customers are required to pay a higher upfront insurance premium for two - wheelers and four - wheelers and hence, sales volumes have dipped in these segments