Third-party motor insurance rate hike to hit two-wheeler business: TVS Motor
TVS Motor has reacted to the new third-party motor insurance rates, which will be implemented from tomorrow, June 1. One of India's largest two-wheeler manufacturer said that the increase in the third-party motor insurance premium will affect the two-wheeler industry which is already battling slowdown and drop in sales in recent times. The company said that amid challenging marketing condition, the hike in TP insurance rates will dent the effort of the industry as a whole to recover.
KN Radhakrishnan, Director and CEO at TVS Motor, said that there has been a steady increase in two-wheeler prices in recent times as the entire auto industry has been facing issues like rise in input costs, lack of supply and other factors. The two-wheeler industry, which is yet to fully recover from the Covid-19 pandemic fallout and is still trying to find a solution to the ongoing global chip crisis, is also wary of rising cost of petrol and diesel to have its effect on overall sales in the segment.
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"As the customer continues to struggle with an increase in the cost of ownership, the recently announced hike of ₹2,200 per vehicle in third party insurance cost will further dent the efforts of the industry to recover itself from this challenging market situation. Further, a strong domestic industry is the basis of global competitiveness and every effort must be made to have a vibrant local market," Radhakrishnan said.
Last week, the Ministry of Road Transport and Highways (MoRTH) announced that the third-party motor insurance premium will be increased from June 1. The new rates will be applicable for both cars and two-wheelers from various categories. The hike in the insurance rates comes after a gap of almost two years since they remained unchanged due to the Covid-19 pandemic. This was also the first time that the ministry issued new rates of third-party motor insurance instead of the Insurance Regulatory and Development Authority of India (IRDAI). However, the ministry finalised the new rates after consulting with regulatory authority.