India car sales set to decline in FY13, first time in a decade

India car sales: Growth of India's automobile sector is expected to become negative in this fiscal, the worst performance in nine years with the latest figures showing a decline in domestic passenger car sales by 12.45 per cent in January.

The data released by the Society of Indian Automobile Manufacturers (SIAM) shows auto makers sold 1,73,420 units of cars in January this year compared to 1,98,079 in the same month in 2012.

The Indian automobile market ranks fifth in the global auto production stakes. The sector contributes about 6 per cent by weight to the index for the total Indian manufacturing sector.

"The way car sales are at the moment, we may not be able to meet the forecast of 0-1 per cent growth for the domestic passenger cars we made last month. It will be in the negative territory this fiscal," SIAM Director General Vishnu Mathur told reporters here. Gloomy macro-economic factors and negative sentiments continue to hit demand this fiscal.

Worried by the performance of the industry, SIAM has called for government intervention in the form of reduction in excise duties in the Budget and special schemes for commercial vehicles under Jawaharlal Nehru National Urban Renewal Mission (JNNURM) to boost the sector.

"In the April-January period this fiscal, the domestic passenger car sales have declined by 1.8 per cent to 15,56,283 units compared to the year-ago period. The overall economic situation is low and the consumer sentiments are deeply negative despite the recent notional rate cuts by the RBI," Mathur said, adding even new model launches have not been able to have a major uplifting impact.

He said the auto industry has put forward demands to the government to reduce excise duties on small cars to 10 per cent and big cars to 22 per cent in the upcoming Budget.

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