SIAM predicts car sales to cross 5.6 mn units mark by 2017

The Society of Indian Automobile Manufacturers (SIAM) today elated the spirits of gradually depressed auto sector. Pawan Goenka, SIAM President said that the size of the domestic passenger vehicles market is expected to reach 5.6 million units by 2017, despite the market witnessing a sluggish growth in recent months. Apart from this, exports can grow to a whopping 1.3 million units by the end of 2017. The observation was made while working on the growth for the 12th Five-Year plan at SIAM’s annual summit.

However, Goenka who is also holding a senior office at Mahindra & Mahindra agrees that a slowdown existed in automobile market in recent months. As interest on loans and fuel became expensive, the market sentiment went gloomy and affected the passenger car sales in India which fell by 8.9% in July and again by 5.7% in August.

In July, SIAM had lowered its car sales growth forecast for financial year 2012 to 11-13% from the earlier estimate of 12-15% made in April, thanks to higher interest rates and rising fuel prices. SIAM may further lower its growth projection for car sales in the India. He opined that government should come out with a national plan and strategy for utilisation of the fuel in the transport sector, rather than discourage its usage.

Goenka argued that once GST(Goods and service tax) bill is implemented, many of the embedded taxes will get eliminated which makes the industry globally non-competitive and create distortions. According to him, the government should also extend the Duty Entitlement Passbook Scheme, which incentivises exporters with tax benefits, beyond September 30th, as no alternate scheme has been offered so far. SIAM supported eco-friendly transport by saying that a renewed focus needs to be put on strengthening of infrastructure for gaseous fuels such as CNG and LPG. The manufacturing sector's target of contributing 25% of the GDP by 2025 should be adopted as an anthem by the Indian car industry which has the potential to play a very critical role in achieving this.

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