Auto industry to face tough time ahead

Automakers in India will face a tough time in coming months as increasing material prices and up-gradation cost joined with new emission norms will possibly decrease the sales volume of the companies. Besides this the Indian government has increased the excise duty on the cars which in turn forced car manufacturers in the country to increase the price of their vehicles.

All major car makers including Maruti, Hyundai, Tata, and Chevrolet have increased prices of their vehicles up to Rs one lakh after the government increased the export duty by 2 percent. Government of India had provided subsidy to auto makers in India by cutting down the excise duty in year 2008 when industry was struggling with recession and decreasing sales and now as automotive industry has registered record braking sales in first two months of this year, the government has decided to roll back this subsidy.

Besides this the government of India is also going to implement the new BS-IV emission norms in the country from the starting of next month. Auto makers have to make some up-gradation in their vehicles to make them compatible to the new emission norms and this will add more pressure on car makers to increase the pricing of their car models in India.

It is expected that the sales in the month of April will be much lesser as compare to the sales in month of March, as new emission norms are going to be implemented in India by month of April this year, said Dilip Chenoy, director-general of industry body SIAM (Society of Indian Automobile Manufacturers).