Excise Cut Fails To Revive Auto

23/12/2008,Asian Age
In spite of the excise duty reduction, the beleaguered auto industry that witnessed a 19 per cent decline in auto sales in November, is expecting a poor sales performance in December and in the remaining part of the fiscal.

According to an expert, "Auto finance has continued to be the major hurdle for sales. The loan rejection ratio has gone up from 10 per cent to 50 per cent due to stricter norms and loan approval processes now take around a month compared to seven days in the past."

Mr Subrata Ray, head, corporate ratings of ICRA said: "Though liquidity is gradually improving this month compared to October and November the auto sector is expected to remain under pressure for six to nine months."

He added, "The commercial vehicle segment specifically, may see double-digit decline in the current fiscal and the passenger car segment is also expected to see a decline in sales."

Mr Ashutosh Dixit, general manager, sales of Skoda India said: "Out of 10 customers only five customers could get loans as the banks still have tightened credit norms."

He said: "Assuming that next six months will be challenging for us we will be launching the new Superb in January 2009," he said. "We are also thinking giving a facelift to our existing models in the next fiscal and are planning to launch a SUV globally by the end of the next year," he said. These initiatives are expected to give a boost to the sales, he added