As sales take a pounding,auto sector petitions govt

With car sales at a 10-month low,motorcycle sales the lowest in three and half years and exports the worst in 11 years,the auto industry has renewed its demand for lower duties in a desperate bid to help boost flagging sales

Written by ENS Economic Bureau | New Delhi | Published:September 11, 2012 1:57 am

With car sales at a 10-month low,motorcycle sales the lowest in three and half years and exports the worst in 11 years,the auto industry has renewed its demand for lower duties in a desperate bid to help boost flagging sales.

Automobiles is India’s marquee manufacturing sector. The slowdown implies there is a clear deceleration in consumer demand in the economy as growth has tapered off. The index of industrial production numbers due on Wednesday are not going to be affected however,as that includes only data till the end of July.

In the wake of the dismal August vehicles sales numbers,partially due to the month-long lockout at Maruti Suzuki’s Manesar plant,the automobile industry on Monday issued a fresh appeal to the government to roll back excise duty that was hiked in the last Union Budget.

Though car sales have been lacklustre since early 2012,it slipped into negative in August for the first time this year,down 18.56 per cent to 1,18,142 units as against 1,45,066 in August 2011.

In October,2011,the industry had fared worse,with sales falling 23.74 per cent.

Similarly,car exports have been dwindling because of weak demand from European markets but August saw the worst decline in the last 11 years at 36,101 units,down 26.83 per cent.

Similarly,motorcycle sales,which have been weakening since July,posted its worse numbers in the last three and a half years at 7,66,127 units,a decline of 8.46 per cent.

The industry is concerned that even on the eve of the festival season starting next month,sentiments in the market are subdued thanks to high interest rates,fuel prices and overall economic gloom.

“This is the time when wholesale numbers should pick up as dealers stock up to meet festival season demand,but this has not happened. We are entering a desperate situation. We need help from the government,” said Sugato Sen,senior director,Society of Indian Automobile Manufacturers (Siam).

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