New Delhi - Arabstoday
Indian automakers sold more cars in February than any month before as buyers rushed to showrooms ahead of a budget seen raising the cost of vehicle ownership, in a boost for an industry that was hit by tumbling demand last year. Car sales rose 13 per cent in February, the biggest rise in 10 months and a fourth straight monthly increase, as carmakers head for marginal sales growth in the current fiscal year that ends this month. Demand for cars in India fell for the first time in three years last July and shrank for four straight months as high interest rates and rising fuel costs deterred buyers, sparking fears of negative growth in the 12 months to March. “The sentiment has certainly improved. It is certain now that interest rates won’t go up, rather they should come down. Liquidity is not a constraint now,” Vishnu Mathur, director general of the Society of Indian Automobile Manufacturers (SIAM), told reporters. “A lot of people wanted to buy their cars before the budget, because they expect prices to go up after the budget,” he said. India unveils its annual budget on Friday, with carmakers anxiously watching for a possible increase in excise duty and a tax on diesel cars or the fuel, which is currently around 50 per cent cheaper than petrol due to government subsidies. Indian automakers sold 211,402 cars in February, according to data released by SIAM on Monday, the biggest ever monthly total. The 13.1 per cent increase on the same month last year is the biggest rise since April 2011. Total sales so far in the fiscal year that ends in March stand at 1.8 million, up 0.3 per cent from the same period a year previous. “The continued recovery is positive, but the crucial thing is to see what happens to sales in the months after the budget, should there be an increase in excise duty or other costs,” said Vineet Hetamasaria, auto analyst at PINC Research in Mumbai. “These numbers should be seen from that perspective.” Rising incomes and a swelling middle class have driven booming car sales growth in India over the past few years.