Reeling under a prolonged demand slump, automobile and consumer durables firms on Wednesday welcomed the government's decision to extend reduced excise rates till December 31, saying it would give a boost to the sectors.
Companies across the two sectors, including Maruti Suzuki, Honda, General Motors, LG India, Godrej Appliances and Whirpool, felt the government's move gives a much needed stimulus to the industry as it leads up to the festive season.
In the interim budget in February, the government had provided for a cut in excise duty in both the sectors to propel sagging sales till June 30.
"It will be good for the auto industry. The momentum that has been built in last few weeks will continue," Maruti Suzuki India chief operating officer (marketing and sales) Mayank Pareek told PTI.
"This will give the much needed boost to industry as we lead up to the festive season," Mahindra & Mahindra executive director Pawan Goenka said.
"The industry has had a tough couple of years. We had just started seeing some rays of hope last month and with this extension of the reduced excise rates, we can look forward to building the momentum," Honda Cars India senior vice president (marketing and sales) Jnaneswar Sen said.
He also said the announcement from the government clears the uncertainty of what will happen after June 30 deadline "and is a much needed support to the industry from the new government".
While welcoming the development, General Motors India president and managing director Arvind Saxena said, "We hope government will extend it for the full year in the Budget as the sector continues to be sluggish."
Consumer durable firms echoed similar sentiments saying the move to extend excise duty concession would help the sector which has seen some growth in the last six months after two years of stagnation.
"We welcome this announcement, it will certainly boost industry," LG India sales head Sanjeev Agarwal said.
The move would benefit the industry, which is started growing in the last six month after a stagnation of nearly two years, Godrej Appliances executive vice president-sales and marketing Kamal Nandi said.
While the budget is slated to be presented on July 10, in the interim budget in February, excise duty on small cars, scooters, motorcycles and commercial vehicles was reduced to 8 per cent from 12 per cent.
For the capital goods and consumer goods, the excise duty was reduced to 10 per cent from 12 per cent.
A Tata Motors spokesperson termed the excise reduction as positive step for the automobile industry.
"We are glad to see it extended as it will help the industry while we await other significant policy decisions to revive the economy," she added.
Hyundai Motor India Ltd (HMIL) also hailed the government decision.
"This will create positive environment for the industry. Continuation of the current duty will help in enhancing customer desire to own cars in future," HMIL senior vice president-sales and marketing Rakesh Srivastava said.
Consumer Electronics and Appliances Manufacturers Association Consumer said the extension of reduced excise duty rates would improve consumer sentiments and strengthen growth.
"The (excise duty concession) extension is good news for the industry as it partially mitigates the cost pressures that the industry has faced," said Shantanu Das Gupta, vice president (corporate affairs and strategy Asia South at Whirlpool of India Ltd.
Samsung said the excise benefits would benefit the local manufacturing.
"This will continue to benefit growth as well as local manufacturing in the sector during the forthcoming months including festival sales," a Samsung Spokesperson said.