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Car sales up by 1.39 percent in February driven by excise cut

11 Mar 2014 Evaluate

Showing a positive trend after a few months of contraction, domestic passenger cars sales increased by 1.39 percent to 1.60 lakh units in the month of February as compared to 1.58 lakh units in the corresponding month last year fuelled by a cut in excise duty.

Total two-wheelers sales also went up by 9.69 percent to 12.20 lakh units in February’2014 against 11.12 lakh units in February 2013. In two wheelers segment, scooter sales were up by 28 percent to 3.11 lakh units in February against 2.43 lakh units in the same month of last year, while, motorcycles sales rose 5.39 percent to 8.43 lakh units in reported month from 8 lakh a year ago. However, commercial vehicles segment is still in negative zone with sales declined by 30 per cent to 47,982 units in the month compared with 68,388 units in February 2013. Three-wheelers sales were also down 14 percent in February on year-on-year basis.

High growth in vehicles sales was mainly attributed to the government as Finance Minister P Chidambaram had last month lowered excise duty on small cars, motorcycles, trucks and buses to 8 percent from 12 percent. The levy on SUVs was cut to 24 percent from 30 percent and taxes on compact cars and sedans were also reduced to 20-24 percent. Consequently, auto companies also reduced the sale prices in February, resulting in a rise in sales.

The Society of Indian Automobile Manufacturers (SIAM), however, maintained a cautious outlook on the automobile industry noting that it was too early to say that the negative trends have reversed. 

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