Financial Daily from THE HINDU group of publications
Friday, Mar 01, 2002
Financial Daily from THE HINDU group of publications Friday, Mar 01, 2002 |
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Industry & Economy
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Automobiles Car cos get a lift; buyers stranded Our Bureau
NEW DELHI, Feb. 28 IF you were waiting for the Budget to buy that car that you were eying for a long time, then the news is you are neither better of, nor worse of! Vehicle prices are not going to dip this time round just because of the lowering of the peak Customs duty rate to 30 per cent as car makers maintain that it is too low to even think of a rationalisation. Most companies say that any gains that result in the lowering of the Customs duty rate have actually been offset by the depreciation of the rupee. The sum and substance of the story is that the Budget has virtually ignored the automobile sector and whatever little changes on the Customs duty front has been proposed will only make the financials of vehicle makers better, but not really translate into cheaper prices for consumers. "Manufacturers with high import content will benefit a bit as the peak rate is lowered. All those manufacturers who were planning to raise prices by a large amount, will now raise prices only to a smaller extent,'' a Delhi-based car maker said. "There is no excitement for the auto industry in this Budget,'' Mr Aditya Vij, President and Managing Director of General Motors India Ltd, said. The industry is pinning hopes on a revival in vehicle demand, led by the Budgetary decision to lower the prices of fuel, particularly petrol. "Here also, it is a mixed bag. There is no rationale for keeping a differential price for petrol and diesel particularly when the ordinary people using two-wheelers use petrol as a fuel,'' Mr Venu Srinivasan, Chairman and Managing Director of TVS Motor Co Ltd, said. As disappointed as the vehicle manufacturers are the component manufacturers. "The Budget is largely neutral for the auto component industry in the short-term, but may stimulate growth in the medium to long-term,'' the Automotive Component Manufacturers Association of India President, Mr K. Kejriwal said.
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