‘Need 140 years to match China’s car market’

NEW DELHI: Maruti President of RC Bhargava blamed the ‘socialist line’ of high taxes on cars and weak bureaucracy for the slow growth of the auto industry. At the current rate, he added, it would take India 140 years to reach China’s level of auto penetration in terms of vehicle ownership.
Bhargava, the longest-serving auto industry executive (88 years old) in the country, said the auto industry’s CAGR has fallen from a high of 12% achieved in the 2000-2010 decade to a low of 3. % for the 2010-22 period period.
“We (India) are at about 30 cars per thousand people. This number has increased by one person per year for the last 5 years. If we have to get to China’s 170 cars per thousand people. Nation, it will take us 140 years. Draw your conclusions,” said Bhargava, who often blames growing regulations on emissions and safety for reducing the affordability of vehicles. low-level convenience, said.
Bhargava struggles to reduce taxes on the auto industry, starting at 28% (GST) and increasing to 50% on larger SUVs. In the case of the EU, he said the tax is around 19% and in Japan it is 10%.
“Should someone think that cars should be taxed above the average tax rate in the economy? In a sense, we’re accepting the fact that cars are a luxury product. should be taxed higher than non-luxury products. This is an old socialist way of thinking.”
He said the growth of the auto industry will remain under strain as long as the central and state governments treat it “as a luxury product that is heavily taxed… Policymakers want it.” ignore market reality”.
Talk about FTA is being negotiated by the government and whether India should agree to cut tariffs, he said it was time for the country to shed its “protectionist mentality”. “My personal opinion is that India should aggressively cut tariffs and join FTAs… Our interests are best protected by putting ourselves in competition – to survive or going down. It’s better to grow under the competition,” he said, adding that FTAs ​​open up a huge market for automakers to expand.


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