Slow Start For Car Sales In 2015, Excise Hike Hits Demand In January

General Motors India reported a 16.01 per cent decline in sales at 4,667 units in January as against 5,557 units in the same month last year.

Commenting on the sales performance, General Motors India Vice President P Balendran said: “The withdrawal of excise duty benefits has significantly affected demand during the previous month. High interest rates and weak economic fundamentals continue to put pressure on car purchases.”

Homegrown utility vehicle Mahindra & Mahindra’s domestic sales declined by eight per cent to 37,045 units last month as against 40,324 units a year earlier.

“The first month of 2015 has not been encouraging as the effect of the withdrawal of excise duty subsidy is clearly evident,” M&M Chief Executive Pravin Shah said.

“Unfortunately, the segmented recovery which we were witnessing over the last couple of months has been impacted with the excise duty change,” he added.

The government had decided against extending the excise duty concessions given to the auto and consumer durables sectors after the expiry on December 31, 2014 and it led to an increase in excise rates by up to 4 per cent. Subsequently, auto companies had passed on the burden to customers from January.

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