Press Trust of India
New Delhi, April 8: Car sales in India grew at the fastest pace in 5 years, up 7.87 per cent in 2015-16, driven largely by new model launches and heavy discounts in a “challenging environment”. According to Society of Indian Automobile Manufacturers (SIAM), domestic car sales stood at 20,25,479 units in 2015-16 as compared with 18,77,706 units in the 2014-15.
“The previous highest growth was achieved in 2010-11 when car sales grew by 29.08 per cent. The growth in 2015-16 was mainly because companies have tried to come up with new models, which have been accepted in the market,” SIAM Deputy Director General Sugato Sen said. Moreover, many companies also gave heavy discounts and a lot of efforts were made by the manufacturers to induce purchase, he added.
Meanwhile, for second time in two months, auto industry body SIAM today revised downward the growth forecast for passenger vehicle sales at 6-8 per cent for the new fiscal citing burden of high taxation and unfavourable environment around diesel vehicles. Society of Indian Automobile Manufacturers (SIAM) had in March revised the growth forecast of passenger vehicles for the new fiscal to 11 per cent from 12 per cent after the imposition of infrastructure cess ranging between 1-4 per cent in the Budget. “Maybe the auto industry is not so confident of growing in low double digits,” Sen said. He said experts and consultants were of the opinion that “this fiscal, the passenger vehicles growth will be 6-8 per cent”, which SIAM also subscribes to the view.
When asked about the reasons for the downward revision, he said factors such as high interest rates and higher cost of acquisition of vehicles by 1-2 per cent after the additional taxes imposed in Budget is playing a role in weak consumer sentiments. “Despite the RBI rate cuts, banks are yet to pass it at the retail level,” Sen said. In Budget 2016-17, Finance Minister Arun Jaitley had announced infrastructure cess of of 1 per cent on petrol/LPG/CNG driven vehicles of length not exceeding 4 meter and engine capacity not exceeding 1,200cc. Singling out diesel vehicles in the aftermath of pollution problems in the national capital, he also imposed 2.5 per cent cess on diesel vehicles of length not exceeding 4 meter and engine capacity not exceeding 1,500cc, while higher engine capacity and SUVs and bigger sedans were slapped a cess of 4 per cent on the value of the car.
