New Delhi
The Society of
Indian Automobile Manufacturers (SIAM) has stated that the rising fuel prices
will have a negative impact on the automobile industry by hitting vehicle
demand and adding to the overall inflationary pressure. The auto body has also
suggested to the government a fitness-based scrappage policy instead of a
policy based on demand stimulus.
Speaking to the
media via a virtual conference, Kenichi Ayukawa, President of SIAM said that he
doesn’t know how long this rise in fuel prices will continue but expects it to
become reasonable down the lane. He added that historically there has always
been a slowdown in demand when there is a rise in fuel prices. He said that
with a rise in diesel prices, transportation costs will increase and give way
to inflation.
Talking about
the scrappage policy, Ayukawa said that vehicles should be regularly tested and
if they aren’t okay enough time should be given for refurbishment. If the
vehicle is still bad then it should be scrapped.
Sharing his
views on the upcoming challenges for the auto industry, the SIAM President said
that a significant increase in commodity prices; global shortage of
semiconductors and the fear of the third COVID-19 wave were the major hurdles that the
autobody can foresee.
Source – Business Standard
Image Source: Image by Niek Verlaan from Pixabay
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