Budget 2014: M&M Says Price Hike, if Excise Duty Cut not Extended
Mahindra & Mahindra says it does not expect a reduction in excise duty on automobiles in Finance Minister Arun Jaitley's maiden budget due in July, but hopes for an extension of the cut provided by Former Finance Minister P Chidambaram in the interim budget in February.
If the excise duty on automobiles is hiked, M&M would have no option but to hike the prices of its vehicles instantly, Pawan Goenka, executive director & president-Automotive & Farm Equipment, Mahindra & Mahindra said. (Watch)
"There is no question of it being absorbed," he said.
"If there was a situation right now where we had to ask for an excise reduction that will be impossible. What we are asking for is continuation of what was given on Feruary 17, that perhaps is doable, because that in a way is built into the calculations. And we know very well that if that was not to happen , the auto industry will really be in trouble," Mr Goenka told NDTV.
The auto industry has been grappling with prolonged slowdown. Car sales in India fell for the second consecutive fiscal in 2013-14 with a drop of 4.65 per cent at 17,86,899 units as compared to 18,74,055 units in the previous fiscal.
In 2012-13, car sales in India fell 6.69 per cent, which was the first decline in a decade.
"In the last two years, we think that two million people have lost their jobs because of automobiles not growing," Mr Goenka said.
India's economy is witnessing the worst slowdown in 25 years, after it grew at sub-5 per cent for the second year in a row in 2013-14.
"If you want to bring back growth from sub-5 per cent to 6,7,8 per cent in the next 2-3 years what are the wheels we need to turn, certainly automobile wheel is one of those wheels that has to turn for the economy to turnaround and therefore the government will certainly know that if right now the industry is just about beginning to turn for the better, right now if we have that blow of excise duty come back, it is going to slowdown the industry terribly," Mr Goenka said.
