Budget Fears Propel February Car Sales Hike

Published: Monday, March 12, 2012, 17:10 [IST]

The auto industry which was slowly picking up speed in January after a very slow 2011 has suddenly accelerated thanks to the forthcoming budget for 2012-13. Several car buyers fearing a steep increase in taxes on cars decided to buy new cars in February helping the industry grow by a massive 13 per cent in February 2012.

Total car sales in February 2012 stood at 2,11,402 units marking a 13.11 per cent increase when compared to sales in the same month last year. The Society of Indian Automobile Manufacturers (SIAM) has confirmed that the new budget has been the trigger for increased sales in February.

Speaking to reporters, SIAM Director General Vishnu Mathur said: “People are expecting increase in car prices after the Budget as the government may roll back two per cent excise concession given as stimulus during the 2008-9 slowdown.”

He added that fears about an increased taxation on diesel cars could also have triggered increased sales. It is a known fact that demand for petrol cars has been on the raise since several months. But the increasing amount of subsidy on diesel arising out of increasing consumption has resulted in economists advising the government to impose higher taxes on diesel cars.

Here is how individual carmaker performed in February 2012. Maruti Suzuki sold 94,118 cars marking a 7.13 per cent increase. Second placed carmaker Hyundai Motors registered a 12.78 per cent increase in sales to 36,658 units. Third placed Tata Motors saw its sales increase by 5.46 per cent to 28,236 units in February 2012.

SIAM went on to add that the country had seen monthly car sales cross the two lakh unit mark for the first time.