Fears of price hike boosts car sales in March 2012

The fear of price hike in the union budget 2012-13 encouraged the sales in the auto sector of the country. In March 2012, the passenger vehicles registered the highest sale of FY 2011-12. This happened because the buyers were trying to avoid the price hikes as the government announced an increase in the excise duty, registration tax and value-added tax. With the increasing demand of vehicles the auto majors of the Indian car market like Maruti Suzuki India, Tata Motors, Honda Siel Cars, Volkswagen India and Mahindra & Mahindra all recorded impressive sales figures for the month of March. The total sales ascended 14 percent since April 2011. Ten of the India’s prominent auto manufacturers showed a growth of 18 percent over the last year with sales figures going up to 270,441 units in March 2012 from 228,793 units in March 2011.

Maruti Suzuki India sold over a million vehicles in the month of March. The total sales were 112,724 units out of which 52,826 belong to the small car segment of M800, Alto, A-Star and Wagon R which saw a dip of 10 percent as compared to March 2011. The sales figure of entry-level segment that includes the Swift hatchback increased by 2.1 percent. On the other hand Tata Motors saw a small rise in its sales which were just 36,984 units out of which 10,475 units were of the Tata Nano. Tata Nano sales registered a total growth of 20 percent. Honda Brio constituted around 60 percent of the total sales in the month of March for Honda Siel Cars India which almost doubled the sales figures. Toyota India was too saved by the new entrants like Etios sedan and Liva hatchback that attracted the 50 percent of the total sales.

The sales of General Motors India too hiked to 5,638 for the Chevrolet Beat diesel which was launched in June 2011. According to Arvind Saxena, Director of Sales and Marketing of Hyundai India, the sales saw an up rise in March as a price hike was anticipated in the union budget so people were interested in beating this price hike. He added that the market will continually place challenges one of which is the high interest rates, the first quarter can see a better scenario if the interest rates come down. Even with strong sales figures there are risks in the auto market which can turn around the sales anytime. Mr. Saxena also mentioned that the exports were cut down to meet the domestic requirements which saw a rise of 22 percent to 39,122 units in March; the exports consequently went down 15 percent to 20,107 units.