Two-Wheelers Are a Necessity : Affordability becoming a huge quandary, two-wheelers are not a luxury but a necessity in the current Indian context, so taxes on these vehicles need to come down as the industry is heading towards a single-digit growth next fiscal, Honda Motorcycle and Scooter India Senior Vice President, Director Jnaneswar Sen told PTI. Income tax rationalisation is also a must to allow middle income people to start spending in India again, Honda Motorcycle and Scooter India (HMSI) Director, Sales and Marketing, Yogesh Mathur added.
Demand for motorcycles has also been soft in the current fiscal compared to scooters on the back of softness in demand from rural market due to several factors such as delayed monsoons, he added. “(Taxing two-wheelers) comes from (point of view of) GST rationalisation, and we have continuously been asking now government to really take care of (it) because two-wheelers in fact are not a luxury. “It is a need for our people to go to work,” Mathur said when asked about industry demands for a cut in taxes on two-wheelers.
At present, however, “last-mile connectivity is not there yet in India and even the public transport is also not adequate and sufficient enough to take care of the growing population, especially the urban areas which are choked right now”.
We know that two-wheeler is still the necessity value, not the luxury…So from that perspective, even the two-wheeler will be a necessity in the personal mobility space and the necessity should not attract tax at 28 per cent, that’s what our industry body and the request that we have to the government,” he added.
For now, two-wheelers upto the engine of 350cc are already taxed at 28 per cent GST and above 350 cc engine attracts 3 per cent cess, taking the total tax to 31 per cent.
Rationalisation in GST will give relief to two-wheeler industry which issuffering from demand headwinds due to less disposable income of the prospective consumers and also higher vehicle costs due to compliance of new laws, he added.
“But, from the customer point of view, the availability of funds in hand is currently not there….Few basic inherent problems which are there in the market for us. There is a need provided the income tax should be rationalised so that middle income people should starts spend,” said Mathur.
He also added, “Farmers these days are also not managing to get the adequate support of the MSPs. That is a challenge. This means that money is only available to a few and now you have regulation change that has also increased the product cost overall.
“Cost of two-wheelers is already going up due to emission norm changes from BS IV to BS VI and OBD 2A to OBD 2B coming due from April 1,” said Mathur.
“The increase in price is phenomenal which created problem of affordability of the people.” That’s a challenge, and that is something that cannot be overnight resolved. It can be addressed only when surplus money with the consumers can be spent with,” he said.
For these reasons, Mathur said “We expect that next fiscal year to be high single-digit growth of the two-wheeler market, as far as industry growth goes.
In the current fiscal too, he said, “We are expecting 10 to 12 per cent growth.
Motorcycle demand in the rural market was affected this fiscal as ‘marriage dates’ were missing in the first quarter, which is one of the two big season of sales along with Diwali period, he added.