Nirmala Sitharaman on Tuesday stated that the mindsets of millennial were adversely affecting the automobile industry as they prefer to use radio taxi services instead of buying own vehicle.

Chennai: Finance Minister Nirmala Sitharaman on Tuesday stated that the mindsets of millennial were adversely affecting the automobile industry as they prefer to use radio taxi services instead of buying own vehicle.

"The automobile and components industry has been affected by BS6 and the mindsets of millennial, who now prefer to have Ola and Uber rather than committing to buying an automobile," said Sitharaman while addressing reporters.

Earlier today, Sitharaman had stated that the government led by Prime Minister Narendra Modi has taken landmark steps in its second term for India to emerge as a five trillion-dollar economy in the next five years amid a domestic and global slowdown.

On skidding sales and job losses in the automobile sector, the minister said that the government departments have been allowed to buy new vehicles.

Automobiles purchased till 31 March next year can avail the benefit of additional depreciation of 15 per cent with total depreciation up to 30 per cent.

Besides BS-IV vehicles bought till 31 March, next year will remain operational for their entire registration period. It may be noted that the automobile sector has seen faltering sales in recent quarters.

Domestic passenger vehicle sales skidded for the 10th consecutive month, falling from 287,198 units in August last year to 196,524 units last month and registering a 31.57 per cent decline.

Sales of commercial vehicles were down 38.71 per cent to 51,897 units in August, SIAM said. Vehicle sales across categories registered a decline of 23.55 per cent to 1,821,490 units from 2,382,436 units in August 2018, it added.

The slowdown in auto sales also stems from a severe liquidity crunch in the non-banking financial sector which has dried up lines of credit to both auto dealers and potential car buyers. The auto industry accounts for nearly half of India's manufacturing output and employs over 3.5 crore people directly and indirectly.