The domestic automobile industry has just one overarching demand from the budget — a continuation of the government’s stimulus packages.
Even as the sector has rebounded to beat the global slowdown, recording double-digit growth since the festival season last year, industry majors believe the stimulus needs to be continued for some more time.
“The government’s stimulus packages were a major factor in the revival of the industry’s fortunes,” said Pawan Goenka, president, Society of Indian Automobile Manufacturers.
“The growth so far this year has been good but the stimulus needs to be continued for some more time. Most of the growth has been on a low base of 2008-09, so when we look at the growth over a two-year period, we are only on track to achieving our medium-term targets. If stimulus is removed now, growth may be hampered.”
Automobile sales in 2008-09 grew only 0.7 per cent over 2007-08. Stimulus measures such as lower excise duties on cars, accelerated rate of depreciation for commercial vehicles and release of funds for modernisation of public transport fleets ensured the continuation of the growth story. Overall domestic sales grew over 22 per cent during April-December 2009.
“We have started the year on a right note and we hope the momentum will continue with the help of the stimulus package,” said Arvind Saxena, director-marketing and sales, Hyundai Motor India Ltd.