Citing reasons for the slowdown, he said increase in axle load limit for commercial vehicles by up to 25 per cent expanded freight capacity, leading to shrinkage of new vehicle demand.
Besides, increase in collateral for dealers from 25 per cent to 60 per cent resulted in reduction in inventory finance to dealers, the minister said.
Further, there has been postponement of purchases in anticipation of discounts by original equipment manufacturers (OEMs) for clearing of stock with BS-IV norms, he added.
Elaborating on the steps being taken to help the sector, Javadekar said the government as a policy maker always attempts to keep and improve momentum of the economy through a package of measures for comprehensive and continued development of the auto sector as and when required.
He said the government has taken steps like reduction in corporate tax to 22 per cent, continuation of registration of internal combustion engine vehicles in future.
Besides, the scrappage policy for auto sector is under consideration of the government, he added.
Javadekar said the proposed increase in registration of new cars has been deferred till June 2020 and funds worth Rs 70,000 crore have been released to PSU banks to help the sector.
Domestic passenger vehicle sales witnessed year-on-year decline in wholesales for almost an year till September this year. The sales increased marginally by 0.28 per cent in October, driven by festive boost.
Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.
As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.
Support quality journalism and subscribe to Business Standard.