Adur Pradeep, OP
Bhubaneswar: The impact of demonetisation and GST could have hurt the prospects of many sectors in the country, but the automobile manufacturers seem to have recovered from the cash crunch which adversely affected their business in November last year.
After a dismal festive season performance in October, automobile sales bounced back in November, thanks to the launch of some new models and robust demand from rural markets.
The dealers of major automobiles in Odisha also echoed similar views regarding the sales situation in the state.
Though the dealers have overcome several disruptions in the economy since November last year, many of them were apprehensive about some recent changes in road taxes in the state.
One of such concerns is the one-time tax rate, which came into effect from November 21, following the amendment in Odisha Motor Vehicles Taxation Act. As per the new five-slab rate, the tax of the two-wheeler will be finalised on the basis of the cost of the vehicle. Earlier, it was fixed at a five per cent flat taxation rate.
As per the new changes, a motorcycle costing less than Rs 5 lakh will be charged at the rate of five per cent, while the bikes carrying a price tag above Rs 5-10 lakh will attract a tax of eight per cent.
A rate of 10 per cent will be applicable for bikes in the price range of Rs 10 lakh to Rs 20 lakh, while bikes which cost more than Rs 20 lakh will have to pay a tax at 12 per cent.
Besides there would be a Rs 1000 green tax, to be collected during the renewal of registration, on vehicles which have completed 15 years.
While talking about several issues faced by the two-wheeler dealers in the state, Dev Prakash Didwania, director, Bharat Motors, told Orissa POST: “The problem we have been facing is in RTO taxes. The Modi government has been talking about ‘one nation, one tax’. But why the same is not being implemented in registration charges also? Why not in RTO charges? RTO charges should also be one tax across India. Unfortunately, it varies from state to state.
“The RTO has increased the road tax for all vehicles. Initially it was five per cent… now it is six per cent… so a customer has to pay an additional Rs 500-1000 depending upon the price of the vehicle from November 21.
Didwania said streamlining of taxes would boost sales of vehicles across the country.
“Easier taxation procedure for vehicles is significant because now every state has a different tax. Since the neighbouring states offer an attractive tax system for vehicle purchase, it would affect the sales here.”
He also voiced apprehensions on the new green tax being imposed in Odisha.
“We don’t have clarity on green tax. We don’t know whether it is applicable for two-wheelers as well. If it is applicable for two-wheelers then there is another Rs 1,000 burden for registration on the customer.”
When asked whether demonetisation and GST had an adverse impact on the business of automobile dealers in the state, he said: “No, they haven’t affected our sales. In the initial days, especially November last year, sales were a bit hampered due to the cash crunch. But now the sales are good.
Didwania also said many of the government policies are skewed in favour of motor companies and the dealers have been receiving a raw deal.
“The automobile industry has been generating good revenues but there is no support for dealers from the government. They may be catering to the demands of motor companies, but are not very sensitive to our problems.
“Then the agreement between dealers and the principal companies is also not in favour of us… it’s always in favour of companies. In that part also, I think the government could intervene and help.”
While talking about the emerging trends in the two-wheeler industry, he said: “The motorcycle sales are going down and scooter sales are improving. The growth is mainly from the gearless scooter segment… like Hero Maestro or Honda Activa.
As per the figures of Society of Indian Automobile Manufacturers, the total sales in the scooter segment reached 5,71,431 units in October this year.
“In future, people will tend to buy scooters more because it is easy to drive in difficult traffic conditions … and one doesn’t have to change gears while driving… it’s fully automatic. In cars also, people now prefer automatic ones because of the traffic. The same trend is being witnessed in two-wheelers as well. People are ready to compromise on mileage as they want a comfortable drive.
“Earlier scooters used to be in the range of 50-60cc… now they have gone up to 125 cc. 150 cc scooters are also available in market now. So companies are focusing more on scooter segment now. They are developing new higher cc scooters … may be in future there will be 200cc, 300cc scooters with features like disc brake, fuel injection, etc,” he added.
