The Telegraph
Tuesday , February 18 , 2014
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4 cheers for auto units

Trade and industry outfits in Jharkhand on Monday hailed the excise duty reduction for automobile sector, sanguine that the move would help Adityapur’s ancillary units, which are currently grappling with market slump, boost their production.

Union finance minister P. Chidambaram’s interim budget announced a four per cent duty slash — from 12 per cent to eight per cent — on heavy and medium commercial vehicles, underscoring the Centre’s manufacturing and job creation committment.

“We believe the excise duty cut will improve consumer sentiment and revive the demand for vehicles of Tata Motors. This way the ancillary units of Adityapur will be benefited,” said R.K. Sinha, former president of Adityapur Small Industries Association (ASIA) and managing director of Adityapur Auto Cluster Limited (AACL).

The Singhbhum Chamber of Commerce and Industry (SCCI) too agreed that lowering excise duty would revive growth in the auto industry.

“The economy of Kolhan is greatly influenced by the auto sector owing to the presence of over 600 ancillary units of Tata Motors in adjoining Seraikela-Kharsawan district. The duty cut will definitely boost production and sale of heavy vehicles manufactured by the auto major,” said SCCI president Suresh Sonthalia.

Tata Motors spokesperson Captain P.J. Singh, however, remained guarded in his reaction. “The slash in excise duty for medium and heavy commercial vehicles is a positive development, but it is premature to predict how the market will behave,” he said.

Notably, there has also been a rise in production target for medium and heavy vehicles at the Jamshedpur plant of Tata Motors this month. Sources said the company had set a target of manufacturing 6,300 vehicles against last month’s 4,200.

Some of the large and medium ancillary units are working overtime. “We have started double shifts at our plant to meet production schedule,” said Bikash Mukherjee, managing director of Auto Profiles Limited, an ancillary of Tata Motors. He gave a thumbs up to the excise duty decision in the interim budget.

The global auto slowdown had forced Tata Motors and its subsidiary TML Drivelines to halt production and go for block closure seven times in the current fiscal. The fall in demand for heavy commercial vehicles was said to be the reason behind the shutdowns.

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