New Delhi: With the two-wheeler industry going through one of the worst phase in the recent past, country’s largest bike maker Hero Honda Motors on 7 February asked the government to streamline the corporate tax rate for the sector ahead of the budget.
The company also said the government needed to consider lowering interest rates and ensure easy availability of finance in rural areas for the sector.
“The two-wheeler industry is one of the very few to have seen a degrowth during the last fiscal owed to lack of finance availability in rural areas and extremely high interest rates. We hope the finance minister would look into these things to help the industry get over the slump in sales,” Hero Honda managing director, Pawan Munjal, told PTI on the sidelines of Hero Mindmine Summit.
He said the government must also re-look at the corporate tax so as to give some relief to the two wheeler makers.
The two-wheeler industry depends heavily on vehicle financing with a majority of sales, nearly 70%, coming through this route. Owed to high interest rates, a vast majority of two-wheeler buyers had delayed their decision to purchase, leading to an overall decline in sales.
High interest rate regime also forced banks to withdraw financing schemes from various rural markets which add significant volumes to overall two-wheeler sales in the country.
The industry, which grew at a steady pace during a major part of previous fiscal, has seen a dip of nearly 80% in sales during the April-December period of this fiscal.