Shares of auto companies declined 1.23% to 4.78% at 14:35 IST on BSE after the government reportedly proposed to hike registration charges on new vehicles.
Bajaj Auto (down 4.78%), Ashok Leyland (down 4.04%), Tata Motors (down 3.87%), TVS Motor Company (down 3.41%), Hero MotoCorp (down 3.34%), Maruti Suzuki India (down 2.71%), Eicher Motors (down 2.21%) and Mahindra and Mahindra (down 1.23%) declined.
The S&P BSE Auto index was down 2.64% at 15,758.30. It under performed the BSE Sensex which was down 0.18% at 37,814.23.
According to reports, new car buyers will have to shell out Rs 5000 instead of Rs 600 currently for registering their vehicle while renewing of 15 year old vehicle will cost Rs 10,000. Two-wheeler buyers who have been paying Rs 50 so far for registration will have to shell out Rs 1000 for new motorcycles and Rs 2000 for renewing the registration of their old two-wheelers. Fleet operators too will have pay Rs 10,000 for new vehicles and Rs 20,000 for renewing the registration of old vehicles. Earlier, commercial vehicle registration charges were Rs 1000.
Further, registration charge for imported cars has gone up to Rs 20,000 from Rs 2500. Government has also proposed frequent fitness test for petrol and diesel vehicles which are over 15 years old and renewing their registration will only be allowed after they comply with the fitness norms.
The auto sector has been struggling with declining sales amid a slowing economy. There is a continued slowdown in the domestic vehicle industry, a latest update from the Automotive Component Manufacturers Association of India (ACMA) noted.
Commenting on the performance of the auto component industry in India, Vinnie Mehta, Director General, ACMA stated that the first-half of the fiscal 2018-19 witnessed a robust double digit growth, however the second-half saw a significant slump in vehicles sales.
Ram Venkataramani, President, ACMA noted that the automotive industry is facing an unprecedented slowdown. The vehicle sales in all segments have continued to plummet for the last several months.
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