Auto sector welcome EV boost, unhappy with excise rate

Last Updated: Saturday, February 28, 2015, 19:22

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New Delhi: Auto industry on Saturday welcomed the move to boost manufacturing of electric vehicles (EVs) in the Budget but said Finance Minister Arun Jaitley could have done more for the sector with a cut in excise duty to help overcome demand slump.

"We were looking forward to a stronger emphasis on the automobile industry from Budget 2015 but there doesn't seem to be much momentum on that front," Nissan India Operations President Guillaume Sicard told PTI.

He added that the industry would have benefited a lot had the excise duty benefits been extended but this Budget has the potential to raise the consumer sentiment which will help the industry grow.

Expressing similar views, General Motors India President and Managing Director Arvind Saxena said: "As far as the automotive industry is concerned, we were expecting excise duty cut on all categories of vehicles as the auto industry continues to bleed due to high interest rates, economic slowdown."

Industry body Society of Indian Automobile Manufacturers (SIAM) said it would have liked to see a reduction or moderation in the excise duty on vehicles particularly for large vehicles attracting 30 per cent excise duty which has not happened.

"We hope that the Finance Minister would reconsider the high taxation on cars in the future," it added.
Similarly, Toyota Kirloskar Motor, Director & Senior Vice President (Sales & Marketing), N Raja said the company was hoping to receive a reduction in the excise duty as that would have helped put the industry back on the trajectory path once again.

Mahindra & Mahindra Executive Director Pawan Goenka termed the government's focus on rural roads, highways, expressways and incentives for electric vehicles as "welcome decisions".

"Infrastructure investment by government is good for the auto industry as more the number of roads the more commercial vehicles get sold," he said.

Commenting on the electric vehicles, he said: "We were eagerly anticipating that something should happen on the electric vehicle front. So, we were hoping for this but this support is less than what we anticipated...It is lower than expectations but finally there is an acknowledgement.. hopefully this is the beginning".

Maruti Suzuki Chairman RC Bhargava termed the Budget positive for the economy as well for the auto industry.

"The auto sector will grow only if economy grows, if jobs are created. So if we look at the sentiments prevailing in the country today, I will rate this budget as positive," he said.