New Delhi, Sep 4 (IANS) Union Heavy Industries and Public Enterprises Minister Praful Patel Wednesday said the automobile industry was facing turbulent times due to the economic slowdown and the government needed to take steps to arrest the fall in the sector.
"Members of the government are feeling a renewed sense of urgency to ensure that the sector is re-energised. I would be happy to organise a joint meeting between the ministers and shareholders to develop an immediate and effective solution to rectify the problems faced by the sector," the minister told the annual summit of the Society of Indian Automobile Manufacturers here.
"Decline of the automobile industry can be attributed to various factors, including the general economic slowdown, high interest rates, increase in fuel prices and decline in the number of new buyers," he said.
The sector is grappling with high fuel and interest costs in an inflationary economy which is driving away first-time customers.
The sales of domestic passenger car segment declined 7.40 percent in July with only 131,163 units being sold from an off-take of 141,646 units in the corresponding period of 2012.
Sales of utility vehicles fell 17.53 percent to 37,010 units while total passenger vehicle sales, including cars, utility vehicles and vans went down 8.31 percent in July to 186,239 units.
Off-take of heavy, medium and light commercial vehicles which are a key indicator of economic activity went down 14.93 percent.
Fuel costs have been on an upswing with the three state-owned oil marketing companies raising prices on the back of the falling rupee.
Petrol and diesel prices were Aug 31 hiked Rs.2.35 and 50 paise per litre, respectively.
SIAM President and Eicher Motors' Royal Enfield unit Chairman S. Sandilya stressed on the need to arrest the decline in the automobile sector.
"Automobile industry is one of the highest contributors of revenue and employment in the country and needs a more moderated tax and excise duty structure," Sandilya said.
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