Friday, April 05, 2013
By Anil Jangid
Auto sector appeals to Finance Minister to withdraw the additional duty on SUVs
The concern related to additional duty on SUVs (Sports Utility Vehicles) is now increasing the worries of automobile manufacturers. Mr Praful Patel (Minister of Heavy Industries and Public Enterprises) expressed his concern regarding the same issue and insisted that the matter should be sorted out soon so that it doesn’t add woes to the auto sector that is already reeling under the threat of economic slump. He has reportedly said that leading car makers have showed a sharp plunge in the sales in the March month and the additional tax on SUVs will further dampen the market.
Passenger car sales growth rate took sharp nosedive by 25.71% in February by hitting lowest in a period of 12 years. The various factors that are mainly responsible for this plunge include constant rise in the fuel prices and rate of interest, lack of consumer interest, etc. Not only these but the proposed budgetary provisions have also axed it badly. Auto industry experts believe that the present slow sales will continue for another three months and it is expected to recover sometime in June. By that time some new cars will be there such as the Ford Ecosport and by that time Honda Amaze will also start giving some volumes on the sales chart.
As per several reports, the minister has written to P Chidambaram (Finance Minster) and insisted upon withdrawing the duty that was announced in the latest Union Budget. He laid a strong emphasis in his plea that since such vehicles are used by rural people due to the lack of proper infrastructure, it is not fair to impose duty on them. The auto sector believe that in the absence of the proposed additional duty, the sector would be able to witness growth because the current sales scenario is really miserable in the context of domestic and global market, both.