The prolonged slump in the domestic automobile industry has impacted the steel sector, Tata Steel Chief Executive Officer and Managing Director TV Narendran said on Thursday.
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 the Confederation of Indian Industry, was speaking to reporters after representatives of various industry bodies held a meeting with Finance Minister Nirmala Sitharaman.
“I think steel touches all parts of the economy...It is 20 percent 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 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 international market is concerned, things are 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 segment being the worst hit.
As per Society of Indian Automobile Manufacturers figures, vehicle wholesale across all the categories declined by 12.35 percent to 60,85,406 units in April-June against 69,42,742 units in same period of last year.
On Wednesday, leaders of the auto industry met the finance minister and asked for a stimulus package, including goods and services tax reduction on vehicles.
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