SAIM seeks Govt aid to boost sales volumes; car sales in Aug at 10-months low

In an attempt to climb out of the sluggish situation, the industry lobby group Society of Indian Automobile Manufacturers (SAIM) has demanded a trim in excise duty and resumption of government purchases. It has sought a stimulus package similar to the one given during the 2008-09 down-turn, stating that the sales have been deteriorating in various segments of auto industry and thus a handholding is inevitable from the government side to boost the sales volumes and lift customer sentiments.

The request has been made by the association following the decline of car sales by 18.56% in August this year, marking the biggest drop in 10-months. The overall vehicle sales in the country also registered a drop of about 3.9% to 13,54,436 units in August this year, the biggest decline in more than three and half years, while the exports also registered the highest decline in more than 11 years, falling 26.83%  during the month.

The excise duties were raised by 2% for small cars to 12% in the Budget announcements last March. For large cars (above 4 meter length), excise went up by 5% to 27% adding concerns to the ailing industry. SAIM also expressed concerns that despite the festive mood, the car sales in August stood at 118,142 units compared to 145,066 units in the same month previous year, down 18.56 per cent, sharpest decline since October 2011.