Budget: Advance purchases drive car sales prior to the budget session

Monday 05 March 2012, 11:35 AM by

The auto market has witnessed recent boom as customers are purchasing new cars to protect themselves from the heat of the price rise, which might happen after the budget session. The customers are basically heading towards car showrooms because of expected rise in excise duty and taxes that are to be levied upon diesel cars. Owing to this, the overall sales of domestic passenger car segment rose by eight per cent in February 2012 as compared to the downfall of 1.2 per cent, which is monitored during initial 10 months of 2011-2012.

Moreover, the supply issues at the production plant of Maruti Suzuki India Limited (MSIL) were also resolved as the normal phase of production started and the improved version of diesel engines is also available with Original Equipment Manufacturer (OEM). This month, the sales of MSIL expanded by seven per cent, although the waiting time for diesel version of ‘Swift Dzire’ has decreased to merely 2-3 months. However, the waiting period for ‘hatchback version of Swift’ is 6-7 months, which is significantly high.

Sridhar Chandrasekhar, Head, CRISIL Research, said, “Diesel cars are being preferred over petrol variants as currently diesel is 36% cheaper than petrol. Consumers are anticipating an additional duty levy on diesel cars. This is pushing consumers to advance their purchases. We expect growth to remain at a similar level in March 2012.”

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