The prolonged slump in the domestic automobile industry has impacted the steel sector, Tata Steel CEO and MD T V Narendran said on. The demand for steel in India has to pick up and that depends a lot on construction and automobile sectors, he added. Narendran, also the vice-president of CII, was speaking to reporters after representatives of various industry bodies held a meeting with Finance Minister Nirmala Sitharaman here.
"I think steel touches all parts of the economy...It is 20 per cent of the steel that gets consumed in auto and that has an impact. That is certainly something that has played out over the last three months," said Narendran. While the auto industry has its own challenges, the government can do a lot in construction and infrastructure segments, but the rest depends on private capital and residential demand, he added. "They (automobile industry) had a separate sitting with the (finance) minister yesterday (Wednesday)... So as far as the international market is concerned, things are a bit soft. The problem is less about international steel flows and more about domestic demand," Narendran said.
The domestic auto industry is witnessing an unprecedented slump in sales, with the passenger vehicles (PV) segment being the worst hit. As per SIAM figures, vehicle wholesale across all the categories declined by 12.35 per cent to 60,85,406 units in April-June against 69,42,742 units in the same period of last year. Leaders of the auto industry met the finance minister and asked for a stimulus package, including GST reduction on vehicles.