Several prominent car manufacturers have voiced their opinion of reducing the excise duties and their expectation from the new Budget.
The automobile industry has high hopes from the new stable government for the Union Budget 2015-2016.
The budget which will be announced on February 28 will be the first full budget from this newly formed government and has garnered great expectations for reduction of excise duty on automobiles and several other things, to put the auto industry on growth trajectory. Budget 2015: Complete Coverage
The decision, if taken likewise, will be in favour of the high demands as well as challenges that this sector faces currently.
The automobile industry body SIAM wants the new government to reduce excise duty in the upcoming budget so that stalled projects can be revived and sales can go up, considering the slow growth of the market.
The sales of passenger vehicles grew to a mere 3.67% in April-December period in 2014.
The industry managed a retailing figure of 18,94,932 units as compared to 18,27,866 units in the last fiscal.
This clearly shows the slow growth of the auto sector.
The government needs to support the sector and consider the roadmap for GST implementation.
Excise duty was reduced for small cars, SUVs, scooters and other commercial vehicles from 12% to 8 per cent last year.
Where for the mid-sized cars, it was cut down to 20 per cent from 24 per cent, it was reduced from 27 percent to 24 per cent for the large cars and 24 percent from 30 percent for the SUVs.
The present government had extended the duty till 31st December 2014 but could not retain it any further.
This led the automobile industry to hike the price of their vehicles post December.
Several prominent car manufacturers have voiced their opinion of reducing the excise duties and their expectation from the new Budget.
Here are few of them that raised their concern on the burning issue. Honda Cars India’s senior Vice President, Jnaneswar Sen shared similar views and said that the industry needs positive economic reforms such as long term excise duty stability, lowering of interest rates and a uniform tax structure which can hopefully bring a sustained growth in the automobile industry.
He also said there should be some crucial steps in modernizing fleet i.e. some solid policies for the replacement for 15-year old vehicles, to encourage people to substitute their old vehicles for the new one.
Renault India too raised similar concerns about the excise duty and said that the industry needs implementation of GST, bringing back the excise duty benefits and commencement of scrappage scheme. He also added that a stable government was needed to bring in necessary reforms and that condition is now met. Budget 2015: Complete Coverage
Hyundai India's Senior Vice President, Sales and Marketing Rakesh Srivastava added that the GDP is still a challenge and the high interest rates are marring the sales.
He put forward a request of rationalization of taxes and implementation of GST for speedy growth in the economy.
Pawan Goenka, ED, Mahindra & Mahindra shared his outlook in a recent interview that the automobile industry has been facing a challenging time from the past one and a half years and since the market has a myriad of players in almost every segment, the growth has slowed down considerably.
He further added that hopes are high from the new government and the car makers are waiting to see a turnaround in the situation.
The company itself has sketched a plan to launch a total of nine products in the coming year based on three new platforms-P601, S101 and U301.
The government needs to read the concerned signs and act before it’s too late to revive the promising but challenging automobile industry.
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