Fuelled by duty cut, Maruti Suzuki, Honda lift February car sales in India

Mar 10 2014, 20:25 IST
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Car sales in India rose to 160,718 in February, up from 158,512 a year earlier. Reuters Car sales in India rose to 160,718 in February, up from 158,512 a year earlier. Reuters
SummaryCar sales in India rose 1.4 per cent in February after four months of decline.

Car sales in India rose 1.4 per cent in February after four months of decline, fuelled by a cut in excise duty and strong demand for Maruti Suzuki and Honda cars.

Car sales rose to 160,718 cars in February, up from 158,512 a year earlier, according to data released by the Society of Indian Automobile Manufacturers (SIAM) here.

SIAM, however, maintained a cautious outlook, noting that it was too early to say if the marginal 1.4 per cent growth had reversed the negative trend.

"It will take some more time to see if the negative trends have reversed. We are getting feedback from companies that footfalls have increased," SIAM Director General Vishnu Mathur told reporters here.

Finance Minister P. Chidambaram had last month lowered excise duty on small cars, motorcycles, trucks and buses to 8 per cent from 12 per cent. The levy on SUVs was cut to 24 per cent from 30 per cent. Taxes on compact cars and sedans were also reduced to 20-24 per cent.

Car companies responded by dropping their price tags to pass on the reductions to customers, resulting in a rise in sales.

"Month after month, numbers are so volatile, there is so much fluctuation that there is no trend visible," Mathur said.

During the April-February period of this financial year, car sales declined 4.6 per cent while the broader passenger vehicle segment witnessed a fall of 5.9 per cent.

"The current fiscal is going to end on a negative for passenger and commercial vehicles. Even if sales are much better in March, it won't be able to erase the effect of rest of the fiscal, which has been largely negative," Mathur said.

Sales of Maruti cars grew nearly 1 per cent to 84,595 units, while Honda more than doubled sales to 14,478 cars in February, up from 6,455 a year earlier.

Hyundai Motor India sold 33,875 units, marginally lower than 33,936 units despatched in February 2013.

Tata Motors' sales dipped 15.77 per cent to 9,026 units in February.

Utility vehicle major Mahindra & Mahindra saw its sales drop 16.16 per cent to 18,766 units.

Commercial vehicles sales were down 29.84 per cent to 47,982 units in February, the 10th straight monthly decline.

"Next fiscal should be better as the new government would come in and roll out policies on various sectors, including mining. Moreover, various projects could also get approval," Mathur

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