Industry leaders, experts welcome excise duty cut on cars

The cut in excise duty for cars in the interim budget has triggered a wave of delight and happiness among auto industry leaders and experts in the country.

SIAM WELCOMES EXCIE DUTY CUT: Vikram Kirloskar, President, SIAM welcomed the announcements made by the Finance Minister in the Vote on Account. “SIAM would like to thank the Finance Minister for recognising the need for a more moderate tax structure for the automotive industry and for accepting SIAM’s tax related recommendations”, he said.

 “We believe that this reduction in excise duty would reduce the acquisition price thereby making vehicles more affordable which would improve the consumer sentiment and hopefully revive the demand for vehicles”, he added. “The automotive industry is the engine of growth for the manufacturing sector as a whole as it supports key industries like auto-components, capital goods, raw materials, electronics, chemicals, plastics, software etc. Revived growth in the automotive industry would have significant positive impact on these key downstream and upstream manufacturing sectors that largely depend on the performance of the auto sector. This could hopefully herald a revival of the manufacturing sector in the days to come,” Kirloskar said.

MAHINDRA & MAHINDRA DELIGHTED: Dr. Pawan Goenka, Executive Director & President (AFS), M&M, said: “We are delighted at the steps taken to boost manufacturing sector and especially the auto industry. From where the industry is today, the budget announcements are quite positive and should give relief to the auto industry by boosting demand. If these initiatives are maintained in the final FY15 budget, it should be a much needed positive stimulus for overall manufacturing sector in India”.

“These announcements are positive and should help the auto industry witness some turnaround. Mahindra welcomes the reduction in excise duty in automobiles across the product range including the SUVs”, said Pravin Shah, Chief Executive, Automotive Division, M&M.

POSITIVE, SAYS ROLAND BERGER STRATEGY CONSULTANTS: “The reduction in excise duty gives the automotive industry a much needed relief after many quarters of demand side challenges. The action of government is welcome, but we reiterate the need to fix the basics of the Indian manufacturing model. We need good infrastructure (road, ports, etc.), reliable and competitively priced electricity and flexible labour laws that allow linkage between salary increases and productivity gains. Consistent policies must help to address the root causes of weak consumer sentiment such as high interest rates, stubbornly high inflation, and increasing fuel prices,” said Dr. Wilfried Aulbur, Managing Partner, Roland Berger Strategy Consultants.

CII WELCOMES REDUCTION: Welcoming the Interim Budget presented by the outgoing government, Kris Gopalakrishnan, President, CII said that “The reduction in excise duty on sectors such as automobiles, capital goods and consumer electronics is indeed welcome, as this will help revive demand in these sectors.”

The CII President also welcomed the fiscal figures outlined by the Finance Minister in the Interim Budget speech. “It is clear that the Government has stayed on the fiscal discipline roadmap and achieving a 4.6 percent fiscal deficit is no small feat. The fact that deficit has been targeted at 4.1 percent for the next fiscal sends a strong signal and should help confidence in the economy.”

ENCOURAGING, SAYS GM INDIA: P Balendran, Vice President, General Motors India said “The interim budget announcements are encouraging for the automobile sector with excise duty reductions across all segments including small cars, sedans and SUVs. GM India will pass on the excise duty relief to its consumers and is currently studying the fine print to determine the exact amount across its carlines.”

“However, it is too early to predict a turnaround in the auto sector. We will have to wait and watch how the market responds and we expect the demand to pick up only if the new Government continues with the excise cut announced in the interim budget,” Balendran added.

As far as other schemes announced in the budget are concerned, it will have a positive impact on the economy only if the new Government holds on to the decisions as the implementation is key, he further added.