The beleaguered Indian automobile industry is expecting to revive its fortunes riding on Narendra Modi’s pro-industry agenda. The industry expects new policies such as implementation of the goods and services tax (GST) to come soon. However, for the immediate future, they want the continuation of the excise duty cuts.

According to the latest report by the Society Of Indian Automobile Manufacturers, the total passenger vehicles’ sales declined by around 10 per cent to 1.88 lakh units in April compared with 2.08 lakh units a year ago. To boost sales, in the Interim Budget, Finance Minister P Chidambaram had announced excise duty cuts on small cars/ motor cycles/ scooters/ commercial vehicles to 8 per cent (from 12 per cent); on sports utility vehicles to 24 per cent (from 30 per cent); large-segment cars to 24 per cent (from 27 per cent); and mid-segment cars to 20 per cent (from 24 per cent).

RC Bhargava, Chairman of Maruti Suzuki India , said that at this moment, the auto sector is in such a shape that removing the excise concession given few months ago will be a negative step.

“He (Modi) has talked about development, job creation, moving manufacturing to a much faster rate of growth, and providing good governance in the country. Whatever is required to achieve all these will be his priority,” Bhargava said. The industry also expects the customer sentiments to improve in the coming days with more footfalls to the showrooms, converting them into sales.

“The new Government’s priority will be to improve the overall economic and sectoral policies at the same time. We would like the excise duty cuts to retain in the coming days, but those are Budget issues, which will be clear in June only,” Vishnu Mathur, Director General, SIAM, told Business Line .

A clear leadership at the Centre would also give a much needed direction to the economy. Implementation of new labour reforms will lead to creation of jobs, especially in the manufacturing sector, said P Balendran, Vice-President, General Motors India .

“We expect the interest rates to fall or remain at current levels for any chances of recovery for the automobile sector during second half of the year,” Balendran added.

In the mid-to long-term, other measures like introduction of GST, rationalisation of taxes, FDI should be taken up after the new Government is formed, said Vinay Piparsania, Executive Director-Marketing, Sales and Service, Ford India . The two-wheeler manufacturers are looking forward to streamlined policies that can bolster infrastructure development, acting as an engine of growth and bringing alive the inclusive growth. “We expect to witness double digit growth in the two-wheeler segment with the new policies and improved buying sentiments of our end-customers,” said Roy Kurian, Vice-President- Sales and Marketing, Yamaha Motor India Sales . Two-wheeler sales were up around 12 per cent to 13.04 lakh units during the month against 11.68 lakh units in April 2013.

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