As finance minister Nirmala Sitharaman blames ‘millennial mindset’ for the slump in car sales, industry experts like TV Mohandas Pai have batted in her support. However, he added that liquidity freeze of NBFCs is to be blamed for the dip
Bengaluru: Finance minister Nirmala Sitharaman finds herself in the eye of a storm over her comments on dip in sales of cars and the correlation she stitched with millennials.
On Tuesday (September 10) she said, "The automobile and components industry has been affected by BS6 and the mindsets of millennials who now prefer to have Ola and Uber rather than committing to buying an automobile."
Quite naturally, she became the butt of all jokes as millennials (born in eighties) tore her apart for her views.
But TV Mohandas Pai, the Chairman of Manipal Global Foundation has thrown his weight behind the finance minister.
He said, “What she says is true. Why do they want to buy luxury cars when they can use cars of their choice when they need it? They choose cars with the help of apps. They want convenience and not debts. Cars are used only 10% worldwide.”
However, Pai was circumspect in saying that this mindset doesn’t explain the present slump in sales.
He said, “But it (the mindset) certainly doesn’t explain why there has been a slump in the sales in the last nine months. It is due to the liquidity freeze of NBFC.”
He also went on to say that such a “millennial mindset” might affect the sales in the future.
The Economic Times quoted that passenger vehicle sales crashed 17% in April — the sharpest decline in nearly eight years — as uncertainty before the general election results, liquidity tightening in the market & high insurance costs have prompted consumers to defer their purchases this season.
Industry estimates around 246,000 vehicles were sold in April, compared with 298,000 units sold in the corresponding period of the last financial year.
In the meantime, arguments against Nirmala Sitharaman in relation to the Ola and Uber car-renting services are that they are limited to metros and tier 2 cities.
Last Updated 3:46 PM IST