The automakers in India have announced that the hiked prices on their cars will be tagged from the dispatches lined up from 16th March, 2012. Till that time or till the old stocks lasts with the dealerships, the buyers can expect to buy their aspired car models at the pre Budget release price.
Since the Union Budget 2012-13 was released in the mid of March instead of at end of the month, the companies are expecting that the dealerships will possess old stock of cars on which the excise duty hike is not yet affected and thereby the costs should not be escalated to be borne by the customers.
Mr. Arvind Saxena, Director of Marketing & Sales, Hyundai Motor India, said on the matter, "Bookings currently held by dealers will be offered at the older price, provided the dealers have the relevant stock." Similar views were expressed by Mr. Pawan Goenka, the President (Auto & Tractor Division), Mahindra & Mahindra.
However, now when the demand is expected to decline due to rise in excise duties, it is at the discretion of the dealerships that are in a position to command higher prices for their old stocks on which the buyers can only seek some intervention that may stimulate the sales growth.
Experts for the automotive sector are anticipating that the adverse effects of the service tax and excise duty hike can be set off with planned and well directed promotional schemes. The automotive companies in the country are estimating that with such a double hit of raised costs, the buyers will face a crunch to spend their lesser disposable incomes leading to a situation of an average auto sector growth by 5 to 7 percent.
