Hit by declining sales and with little hope for immediate recovery in a slowing economy, the Indian auto industry plans to ask the Government for some sops to boost consumer sentiment.
“We have started talking internally about it with our members because something has to be done by the Government. It would not be a major demand, but some sort of relief, so that the industry gets back growth momentum,” Vishnu Mathur, Director General at Society of Indian Automobile Manufacturers, told Business Line .
He said that efforts by individual car makers can no longer help improve sales.
“There is an important need for steps that improve the sentiment and then serve as a catalyst to overall economic growth, not just the auto business,” Karl Slym, MD, Tata Motors, said, while pleading for a “rational look” at taxation across industry.
Slym said these include Government action on infrastructure and mining, clarity on investment in different segments, speedy implementation of policies and schemes that strongly position India within the emerging markets.
P. Balendran, Vice-President, General Motors India, said the Government should come out with some plans to revive the industry, similar to the sort of stimulus package that it gave in December 2008 by cutting down the excise duty by four per cent.
He said the interest rates should also come down, because fewer people are going to showrooms as interest rates are still high.
The footfalls are still low even though companies are coming up with easy instalments plans, extended warranties and freebies.
Manufacturers would also keep increasing prices if the economic conditions such as the rupee devaluation continue, Balendran said.
However, analysts are not hopeful of the Government coming up with any significant measures in the near future.
“What can the Government do at this point in time? Nothing,” said R.C. Bharagava, Chairman, Maruti Suzuki India.