2.3% Up In February, Car Sales Likely To Go Further Up In March
The automobile industry, which witnessed a marginal 2.3% growth in car sales in the domestic market in February, is expected to see further surge in sales in the current month of March. The reason mainly was that people postponed new purchases on expectation of a tax cut in the Budget, which came true for small car buyers.
The figures released by the Society of Indian Automobile Manufacturers (SIAM) show that car sales in February stood at 94,756 units as compared to 92,618 units in the same month last year. The figures show that passenger car sales surged by a little over 2% to 94,756 units in February’08 as compared to 92,618 units in February’07. Passenger vehicles, which include utility vehicles, cars and multi-utility vehicles, grew 7.8%, clocking 1.25 lakh units.
Those who postponed new purchases will certainly be benefited by 4% excise duty cut in the Budget on the small cars was followed by immediate price cuts by top companies like Maruti, Hyundai, Tata Motors and General Motors. This is likely to result in massive car sales in March.
Mahindra Renault’s MD Rajesh Jejurikar said, “I think, February sales figures are not the true indicators for the car industry’s growth. Most customers and manufacturers postpone their plans and wait for the budget announcements. The car industry can easily see a 10% CAGR in the next 4-5 years.”
While two-wheeler industry continued to de-grow and was down by about 14% selling 5.42 lakh units, March is viewed as better month for the domestic car industry. Small cars command a dominating share in the Indian car market, accounting for 70% of new sales. Overall car sales in the 11 months of the current financial year have grown 11.74% in April-February 2008 as compared to April-February 2007, despite high interest rates, on account of new model launches.