Car Sales Receive Unexpected Thrust Due to Expected Price Hike

The latest sentiments doing rounds in the Indian auto industry speak up that there may be a hike in excise duty of cars. Although models like Tata Nano and Maruti Alto may remain unaffected, a general increase of excise duty is expected from 8 percent to 12 percent. This means that cars are going to be pricier from April 01, 2010. This general expectation amongst car buyers has led to sudden thrust in car sales across the country.

Auto manufacturer in India have increased their production to meet the demand. February and March are usually considered as slack month when car makers have to put in extra efforts to sell the models. However, the mid-sized cars like Honda City are expected to get pricier which makes their sales easy. This certainly reminds of era in Nehru times when taxes were increased year after year. Pranab Mujherjee is expected to hike the excise duty on cars to prevent local industry to go into recession once again.

Thus, models like Maruti Swift, Honda City, Toyota Innova, Fiat’s Grand Punto are upbeat in an otherwise slow sales month. “We see a lot of advancing of purchases this month, both among individuals and corporates,” said Mohan Mariwala, who runs Honda and Mercedes dealerships.

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