New Delhi, Feb 17 (IANS): Indian automobile industry Monday welcomed Finance Minister P. Chidambaram's move to cut excise duty on several product types of the sector.

"We believe this reduction in excise duty would reduce the acquisition price, thereby making vehicles more affordable - which would improve the consumer sentiment, and hopefully revive the demand for vehicles," Vikram Kirloskar, president, Society of Indian Manufacturers (SIAM), said.

Kirloskar described the automotive industry as the engine of manufacturing sector growth for and a key support to sub-industries like components, capital goods, raw materials, electronics, chemicals, plastics and software.

"Revived growth in the automotive industry would have significant positive impact on these key downstream and upstream manufacturing sectors that largely depend on the performance of the auto sector," Kirloskar added.

Mahindra and Mahindra’s executive director Pawan Goenka told a television channel that the utility vehicles manufacturer would pass on the excise duty reduction to consumers and that he saw a reduction of Rs.40,000 in sports utility vehicle (SUV) prices.

In the interim budget 2014-15 speech Finance Minister Chidambaram reduced the central excise on small cars, scooters/two-wheelers from 12 to 8 percent.

He also reduced the central excise from 30 percent to 24 percent on SUVs, and medium segment sedans from 27-24 percent to 24-20 percent, respectively.