Car sales skid in Dec, auto industry seeks cut in excise duty

The is the biggest drop since August, 2012 when sales had declined by 18.5 percent.

New Delhi: Passenger car sales in the country declined by 12.5 percent in December last year, the steepest fall in the last four months, due to high interest rates, rising fuel prices and overall slowdown in economic growth.

According to the Society of Indian Automobile Manufacturers (SIAM), domestic car sales in December last year was 1,41,083 units, 12.5 percent lower that 1,61,247 units sold in the same month in 2011.

The is the biggest drop since August, 2012 when sales had declined by 18.5 percent.

"Sentiments have not been improved. Interest rates are still high. Even fuel prices remain on higher side and the economy is down," SIAM President S Nadiya said.

To boost the industry sentiment and growth, SIAM demanded a reduction in excise duty and continuation of all benefits of Auto Mission Plan (AMP) for another 10 years till 2026.

"Going by the current trends, we do not think industry will be able to recover in the fourth quarter unless the government provides support," he said.

He said the excise duty on automobiles, which was increased in the last year Budget, needs to be reduced, particularly on commercial vehicles.

Sandal's asked for early implementation of GSA as the move would help in boost the sector's growth.

"Early introduction of CST will help in boosting the industry's growth. SIAM also requests to look into the possibility of extending AMP till 2026 to further nurture the sector," he told reporters.

The total vehicles sales across categories, however, registered an increase of 2.77 percent at 14,51,517 units last month as against 14,12,372 units in December, 2011.

The industry body has revised its sales forecast for passenger cars this fiscal to zero to one percent as against an earlier forecast of 1-3 percent.