In addition to the challenges due to the pandemic, the continued shortage of semiconductor chips, the high cost of raw materials and rising fuel prices have impacted demand.
TVS Motor Company Says Rising Insurance Rates Will Hamper Industry Recovery
The increase in liability insurance for two-wheelers announced by the government from June 1, 2022 will further hamper the industry’s efforts to recover from the difficult market situation, said KN Radhakrishnan, Director and CEO of TVS Motor Company. The senior TVS official said in a statement today that the automotive industry has been hit by a series of headwinds, leading to a steady rise in prices for two-wheelers. Besides the challenges posed by the pandemic, the continued shortage of semiconductor chips, high cost of raw materials and rising fuel prices have impacted demand, the TVS official said.
Read also : Car and two-wheeler insurance rates are expected to increase from June 1, 2022
“The automotive industry has been hit by a series of headwinds, resulting in steadily rising prices for two-wheelers. In addition to the woes of the pandemic, continued shortages of semiconductor chips, high raw material costs and l increase in fuel prices, As the customer continues to struggle with an increase in the cost of ownership, the recently announced rise of ₹2,200 per vehicle in the cost of liability insurance will further hamper the industry’s efforts to recover from this difficult market situation. Moreover, a strong domestic industry is the basis of global competitiveness and every effort should be made to have a vibrant local market,” Radhakrishnan said.
On May 25, 2022, the government approved new base premium rates for motor vehicle liability insurance. The revised rates will be applicable from June 1, 2022. These rates were last revised for fiscal year 2019-20 and have remained unchanged during the COVID-19 pandemic. Under the revised tariffs, for two-wheelers over 150cc but not exceeding 350cc, the insurance premium will be ₹1,366 while two-wheelers over 350cc will require a premium of ₹2,804 ₹. Under the new tariffs, liability insurance for passenger cars with an engine capacity between 1000 cc and 1500 cc has been increased to ₹3,416 from ₹3,221 in 2019-2020.
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