Auto sector hit by excise duty revision, fuel prices: M&M

The various factors that are impacting the industry are the revision in excise duty, which has been increased by 3 percent on certain category of UV products. Fluctuating fuel prices, no relief in interest rate also affecting sales.
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Oct 01, 2013, 08.12 PM | Source: CNBC-TV18

Auto sector hit by excise duty revision, fuel prices: M&M

The various factors that are impacting the industry are the revision in excise duty, which has been increased by 3 percent on certain category of UV products. Fluctuating fuel prices, no relief in interest rate also affecting sales.

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Auto sector hit by excise duty revision, fuel prices: M&M

The various factors that are impacting the industry are the revision in excise duty, which has been increased by 3 percent on certain category of UV products. Fluctuating fuel prices, no relief in interest rate also affecting sales.

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Mahindra & Mahindra (M&M), India's leading SUV manufacturer, today announced a fall of 10.45% in its auto sales volume to 43,289 units for September 2013 against 48,342 units in September 2012.

Also Read: High rates, prices push back hopes of auto sales recovery

Pravin Shah, CEO of automotive division at M&M, says: "The comforting factor is as compared to August and September, we have a growth of around 14 percent volume and for the right reasons like the festive season. The situation continues to be a challenging one for the industry as a whole and especially for the UV segment, which saw unprecedented growth last year. The overall growth last year was 52 percent. Compared to that if one looks at the first five months of the current year, the overall industry has de-grown by 4 percent inspite of the various new launches in this space."

The various factors that are impacting the industry and just to name a few are the revision in excise duty where the excise duty has been increased by 3 percent on certain category of UV products, he says. Fluctuating fuel prices, no relief in interest rate - on the contrary an increase of 25 basis points in the last revision on September 20 is dampening demand, he adds.

According to Shah, the overall economic scene which is not so conducive is a real cause of concern and till the time some sort of an incentive or some sort of a stimulus package is announced for the industry, for which there has been representation by the industry body, the industry will continue to struggle.

The good thing is from this month on the festive season starts, which is traditionally better than other normal months, and we hope to see certain upsurge in demand as compared to the normal months, he says. However, demand during this festive season is not expected to be as what one has seen in the recent past, he adds.

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Auto sector hit by excise duty revision, fuel prices: M&M

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