Defying fears of a meltdown, the domestic passenger car industry got off to a steady start in 2015, following the government’s decision to withdraw excise duty concessions, which were in force for much of last year.
Most car firms registered high single-digit or doubledigit growth last month, with market leader Maruti Suzuki India up 9.3%, Hyundai Motor India up 4%, and Honda, Tata Motors and Toyota Kirloskar rising 16.6%, 18.9% and 15.9%, respectively, over January 2014. Higher sales, however, did not mitigate fears of the industry spiralling into a third consecutive decline in annual sales in 2014-15 due to higher cost and sluggishness in the overall economy.
“Increased prices on account of the excise duty hike is still impacting the market. We hope the government would reconsider the concessions in the upcoming budget,” said N Raja, director, sales, Toyota Kirloskar. “In line with the ‘Make in India’ campaign, structural reforms for the auto sector are essential.”