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Updated: July 12, 2013 22:33 IST

SIAM seeks stimulus package

Staff Reporter
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Car sales down for the eighth consecutive month in June

With car sales declining for the eighth consecutive month in June, the automobile industry, on Friday, sought a government package to revive the sector.

The domestic car sales fell 9 per cent to 1.40 lakh units in June from 1.53 lakh units in the same month in 2012, according to the latest figures from the Society of Indian Automobile Manufacturers (SIAM).

“The slow economic growth, high interest rates as well as fuel prices, and high inflation are all affecting consumer sentiments. The government needs to have a re-look and bring a stimulus package for the auto industry, which will help in achieving higher growth,” SIAM President S. Sandilya told reporters here.

The industry body was looking at a stimulus package similar to the one given during the 2008-09 downturn, in which the excise duty on two-wheelers, small cars and commercial vehicles was reduced to 8 per cent, SIAM Director-General Vishnu Mathur said. He, however, added that the body had not yet approached the government for the same.

For the first quarter (April-June) of this fiscal, domestic car sales declined by 10.41 per cent against a forecast of 3-5 per cent rise by the SIAM in April.

Similarly, two-wheeler sales dipped by 0.82 per cent against a forecast of 6-8 per cent growth and commercial vehicles were down 8.12 per cent against a projected growth of 7-9 per cent.

Volatile scenario

“In such a volatile scenario, we thought it doesn’t make sense to give a revised forecast now,” he said, adding that it was unlikely that the growth projection made in April would be met in almost all the segments this fiscal, except in the two-wheeler segment.

In June, Maruti Suzuki India reported 8.17 per cent fall in sales at 65,172 units. Hyundai Motor India’s sales rose marginally to 30,577 units from 30,363 units, while Tata Motors’ sales tumbled by 29.17 per cent to 9,628 units.

SIAM said motorcycle sales during the said month fell by 9.16 per cent to 7.99 lakh units, while scooter sales were up by 15.16 per cent at 2.58 lakh units.

“With 50 per cent of the two-wheeler sales coming from rural areas, we hope that the monsoon, which is average or above average so far, will have a positive impact on sales,” Mr. Mathur said.

Total sales of commercial vehicles declined by 13.45 per cent to 56,197 units from 64,928 units in the year-ago period, SIAM said.

“The commercial vehicles segment is the most depressing scenario. This is the 15th successive month of decline in the segment as there is overall slowdown in economy and freight movement has been affected,” Mr. Mathur said.

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