All eyes were on the new government what it will deliver as a return gift to the auto industry with the new PM and other new ministers settled in their cabinets. However, it seems the government went easy with the automakers as announced the excise duty reduction by the previous UPA government to be extended till December 31, 2014. Hope so, it means the rainy clouds are still hovering the heads of automakers after the end of calendar year 2014. Despite the low sales the industry can enjoy the benefits till time.
All thanks to Union Finance Minister Arun Jaitley for having such a delighting opinion about this industry.
The excise duty on small cars, motorcycles, scooters and commercial vehicles were trimmed to 8 percent from 12 percent, while the excise on SUVs was reduced dropped to 24 percent from the earlier 30 percent. On large cars, it was reduced to 24 percent from 27 percent, and to 20 percent from 24 percent on midsized cars. The duty on auto components had been cut to 10 percent.
“We welcome the Union Government’s move to extend the excise duty concession on automobiles for an additional six months. We will continue to pass this benefit to our dealers and customers. However, the recent increase in freight cost, rising fuel prices, high interest rates and the weak monsoon forecast play a dampening effect in the overall economic growth and tough market conditions that is being faced by us.” said Mr. Sunil Rekhi, Chief Financial Officer, Nissan India.
Commenting on this issue, Mr Arvind Saxena, President and Managing Director, GM, India has welcomed the announcement made by Hon’ble Finance Minister, Mr Arun Jaitley on extending the excise duty concession on automobiles for six months till December 31. In a statement issued to the media Mr Saxena has said, “It’s a welcome decision and we hope Govt will extend it for the full year in the upcoming budget as the sector continues to be sluggish. We also expect Govt to announce other measures in the budget to revive the growth.”
Overall, the car sales remained all time low for the most of the year, but during the May it saw a slight surge of 3% in the entire fraternity. Hope so, continuing with intuitive blueprints of financing ministry it will be easy to cash upon the upcoming festive season.
Well, the railway commuters were frustrated with the fiasco led by the new government of hiking the fare by a unanimous ratio. We hope, the same danger may not fright the dreams of automakers for the Ache din from Modi government in the near future.