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Crisis Deepens in the Automobile Segment

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After having reduced the production of Maruti cars by 33.99 percent in August, the country’s largest carmaker company is noted to have again reduced its production in September by 17.48 percent, making it the eighth straight month it has lowered its output.

The organization’s move comes in the wake of an exceptional stoppage in the local vehicle industry, constraining auto organizations to take creation slices so as to decrease stock at businesses. MSI produced a total of 1,32,199 units in September as against 1,60,219 units in the year-ago month, Maruti Suzuki India (MSI) said in a regulatory filing.

According to PTI source, Production of mini and compact segment cars, including Alto, New WagonR, Celerio, Ignis, Swift, Baleno and Dzire stood at 98,337 units as against 1,15,576 units in September last year, down 14.91 percent. Similarly, production of utility vehicles such as Vitara Brezza, Ertiga and S-Cross declined 17.05 percent to 18,435 units as compared with 22,226 units a year ago.

In August, the automaker had cut its production by 33.99 percent at 1,11,370 units.

Tata Motors also reported a 63 percent drop in production of passenger vehicles in September at 6,976 units as compared to 18,855 units in the same period last year.

All the major automobile makers, including MSI, Hyundai, Mahindra & Mahindra, Tata Motors, Toyota and Honda, have reported double digit decline in domestic passenger vehicle sales in September as onset of the festive season failed to lift the ongoing slump in the auto industry.

According to data released by the Society of Indian Automobile Manufacturers (SIAM), overall sales of commercial vehicles were down 38.71 percent to 51,897 units in August as compared with 84,668 units in August 2018.

In August, commercial vehicle manufacturers curtailed production at their plants by 42.05 percent to 54,873 units as compared with 94,698 units in August 2018, SIAM said.

In September, the government slashed the effective corporate tax to 25.17 percent, inclusive of all cess and surcharges for domestic companies. Making the announcement, Finance Minister Nirmala Sitharaman said the new tax rate will be applicable from the current fiscal, which began on 1 April.

“The reduction of the corporate tax to 15 percent for new companies making fresh investments from 1 October 2019, will support investment and also FDI in the auto sector. This is expected to give a big boost to Make in India for the automobile industry,” the Society of Indian Automobile Manufacturers (SIAM) President, Rajan Wadhera, said in a statement.

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