FICCI suggests props for auto industry as profits plunge
31 January 2009
The Federation of Indian Chambers of Commerce and Industry (FICCI) has suggested increased government incentives to both domestic auto industry and foreign investments in the sector.
FICCI also called for an appropriate tariff policy in the country to safeguard the interests of the domestic auto industry against a surge in imports and to develop adequate indigenous manufacturing base.
The auto industry in several developing countries hasw been growing fast with government support, the industry body pointed out in a study, 'Automotive Policies And Incentives in Developing Countries.'
The study comes close on the heels of huge quarterly losses registered by major domestic auto firms Tata Motors and Mahindra and Mahindra.
Tata Motors reported a quarterly loss of Rs263 crore in the October-December 2008 period due to foreign exchange loss and a massive decline in sales. The company had a profit of Rs499 crore in the same quarter of the previous financial year.
Demand slowdown in the automobile sector has hit Tata Motors' sales of trucks, Indica cars, and Safari sport-utility vehicles very badly in India and overseas, with volumes dipping 32 per cent to 98,760 vehicles in Q3.