No slowdown in automobile sector, claims traders body CAIT

Traders body CAIT on Tuesday said there is no slowdown in the domestic automobile sector and the industry is making hue and cry only to get a package from the government. The auto industry has been attributing the sales downturn to several factors like high GST (Goods and Services Tax) rates, farm distress, stagnant wages and liquidity constraints.

"There is no slowdown in the domestic automobile sector. They are saying this to get a package from the government," Confederation of All India Traders (CAIT) Secretary General Praveen Khandelwal told reporters here. Citing an example of new vehicle launches, he said companies have received huge number of bookings, which do not reflect any slowdown in the sector.

His comments follow production cuts announced by leading auto makers like Maruti Suzuki and Ashok Leyland to adjust output with the slowing demand. According to industry body SIAM data, automobile sales in India witnessed its worst-ever drop in August. Vehicle sales across categories, including passenger vehicles (PVs) and two-wheelers and commercial vehicles (CVs), dropped by 23.55 per cent to 18,21,490 units last month as against 23,82,436 units in August 2018.

Talking about recent festival sales announced by global e-commerce firms like Amazon and Flipkart, Khandelwal demanded immediate action from the government to ban these mega sales. He claimed that such firms are violating foreign direct investment (FDI) norms in the e-commerce sector.

"If the government does not take action, we will approach the court," he said. He also said these e-commerce companies are allowed to do only B2B business but they are indulging in big advertisement campaign.

"These companies are not doing business, this is the business of valuation. They should give details of top 10 vendors in the last five years," he said. He also said interest rates are high in India and global firms get loans at cheap rates.

Commenting on CAIT's remarks, Rajneesh Kumar, SVP and Chief Corporate Affairs Officer Flipkart Group, said that the company provides market access to lakhs of businesses which include sellers, domestic manufacturers, MSMEs and artisans and give them access to millions of consumers across the country. "We have also brought in thousands of kiranas and general trade stores to boost last mile connectivity and augment their income," he said in a statement.

He added lakhs of these local Indian businesses/traders on the platform look forward to the Big Billion Days festive event as an opportunity and a landmark moment in their financial year. "We are a fully compliant organisation...," he said.