CII chief rules out price reduction in auto sector

New Delhi, March 31 (IANS) The auto sector has no scope for any further price reduction, according to TVS Motor chairman and managing director Venu Srinivasan, the newly-elected president of industry group Confederation of Indian Industry (CII).

'The auto sector is among the worst-hit sectors and the higher interest rate has further hit the profit margins of auto companies,' Srinivasan told reporters after taking over as CII chief Tuesday.

The heavy automobile segment comprising trucks and buses have been particularly hit by high input costs, he said, adding: 'When banks are lending at 13 percent, where is the scope for any price cut? Interest rate is still very high, so this is hurting the industry a lot.'

The two stimulus packages unveiled earlier by the government have helped to an extent 'but still, more measures should be taken', Srinivasan said.

'The fiscal measures are not reaching the end customers as the lending rate for industry is still at 13 percent. As long as the interest rate is in double digits, we hardly see any scope for long term growth.'