Proposed steep hike in vehicle registration will badly hit industry: SIAM

The down-for-nine-months India Auto Inc seems to be contending with new challenges every other day. This time it is about the proposed – and massive at that – hike in new vehicle registration.     

Therefore, it is not surprising that apex industry body Society of Indian Automobile Manufacturers (SIAM) has expressed serious concern on the recent draft notification issued by the Ministry of Road Transport & Highways (MoRTH), which proposes increase of registration charges of new vehicles by 10 to 20 times, depending upon the vehicle category, from the present level (see the detailed table below).

Under the proposed rules, new medium-duty goods / passenger vehicles will attract a Rs 20,000 registration fee instead of the current Rs 1,000 (up 1,900%). A new truck or a bus will see a fee of Rs 20,000 instead of the current Rs 1,500 (up 1,233%). The registration charge for a new two- wheeler is proposed to be Rs 1,000 in place of the current Rs 50 (up 1,900%). Similarly, the registration fee for a new car is proposed to be Rs 5,000, up from the Rs 600 at present (up 733%).

While new vehicle sales are already reeling under the downturn, sales of used vehicles will also bear the brunt. In fact, the proposed vehicle renewal registration fees are up a whopping 3,900 percent for motorcycles!   

Industry currently at a record low
Given that the ongoing and unprecedented slowdown has brought the industry down to its knees, as sales of new vehicles have plummeted significantly over the past nine months, any hike in vehicle registration fees will only serve to deal a body blow to the automobile industry, and in turn to the country, considering India Auto Inc is a major contributor to the manufacturing GDP and overall GDP.

Commenting on the proposed hike, Rajan Wadhera, president, SIAM said: “Such an increase in the registration charges of new vehicles would further aggravate the market condition negatively.”

SIAM has suggested that instead of hiking registration charges for new vehicles, the government of India should first look at implementing various measures as suggested by SIAM to revive growth in the domestic automotive industry.