Given the apprehensions of a rise in prices after the Budget, passenger vehicle sales rose 16 per cent last month to 269,841 units, the highest monthly rise in at least a year.
Car sales grew 13.11 per cent to 211,402 units in February, providing respite to vehicle manufacturers, who have been battling slow sales since July. Demand for cars had fallen for the first time in three years in July 2011 on the back of high interest rates and rising fuel prices, deterring entry-level buyers from fresh purchases.
Vishnu Mathur, director general, Society of Indian Automobile Manufacturers, said, “People are expecting an increase in car prices after the Budget, as the government may roll back the two per cent excise concession given as stimulus during the 2008-09 slowdown. There is also a fear that diesel cars may cost more, as additional taxes may be imposed on them. This boosted sales.” During February, the country's largest car make, Maruti Suzuki India, sold 107,653 vehicles, an increase of six per cent, as compared to the corresponding period last year.
While rival Hyundai Motor India's sales grew by 12.8 per cent to 36,805 units, Tata Motors' sales increased by 15per cent to 40,961 units.
Mathur added, "There has been an improvement, as consumers are no longer expecting increase in interest rates. This is the first time ever that the monthly car sales crossed the two lakh units mark.”
The industry body said it is expecting car sales to grow between zero and two per cent this financial year, as had been projected earlier in January.
SIAM has forecast passenger car sales to gain momentum and increase by 11-13 per cent in the coming financial year, provided the Reserve Bank of India brings down interest rates. Interest rates have risen by 13 times since March 2010, forcing entry-level buyers to postpone purchases.
Benefiting from slowing car sales, the motorcycle segment grew by eight per cent or 838,193 units last month from 7,76,005 units in the same month last year.
Market leader Hero MotoCorp witnessed a growth of 9.55 per cent at 4,70,994 units, compared to the same month a year ago. Rival Bajaj Auto's sales decreased marginally by 0.59 per cent to 2,03,919 units from the same month last year.
Total sales of commercial vehicles, a key indicator of India’s economic activity, increased by 18.7 per cent to 76,891 units from 64,775 units in the year-ago period. In February, total sale of vehicles across categories registered a growth of 12.06 per cent to 15,33,474 units, as against 13,68,370 units in the same month of 2011.