Hit by fall in sales and lack of demand motown has sent an SOS to the government. In the industry's status report to the finance ministry, auto makers are seeking the government's assistance to revive sales going forward. CNBC-TV18's Ronojoy Banerjee reports.
The auto sector is clearly rattled. First you had the slowdown, which prompted the apex auto body SIAM to lower the growth forecast for the passenger car segment three times so far this year to just 1-3 percent. Then you had the Supreme Court ruling on Fiat because of which many original equipment manufactures (OEMs) were sent notices.
Therefore, this is really an effort by the industry to reach out to the government ahead of the budget; to apprise them of the situation that they find themselves in. That is why the industry has sent a status report and would be meeting senior finance ministry officials on Monday. This would be the first formal meeting between finance ministry and an industry body as part of the pre-budget meetings.
Among the key demands that have been put forth is once again the industry has sought the government to reduce excise duty specifically on small cars back to 10 percent. Last time around the finance minister then had increased the excise duty on large vehicles as well from 22 percent to 24 percent and including all other taxes it ranges anywhere between 24 and 27 percent on the larger vehicles. So, this the industry wants back at 22 percent. The big focus this time is on the commercial vehicle segment where they want some sort of a package and also they want the government to consider introducing a scrap it scheme.
Source Sales slowdown: Auto majors send SOS to FinMin - CNBC-TV18