The domestic car sales grew in February logging the best ever sales in a month as the consumer sentiment registered a turnaround from the scepticism that ruled for much of this fiscal. The consumers rushed their purchases before the Union Budget on Friday, where a hike in duties is expected, which in turn will make the cars expensive.
Car sales grew 13% during the month to 2,11,402 units, the first time ever that more than 2 lakh cars were sold in a month. It is widely expected that excise duties on all cars would be raised by 2% with an additional surcharge on diesel cars.
The stellar sales in February on the back of a similar performance in January, is certain to lift overall sales in the fiscal to the positive zone. With only a month to go, car sales have grown by 0.3% in this fiscal so far. Till December 2011, it was down 2.5%. Last month's growth was the biggest in 10 months.
"The sentiment has certainly improved as interest rates are not likely to go up now," said Vishnu Mathur, director general, Society of Indian Automobile Manufacturers (SIAM). "Liquidity is no longer a constraint. Also there is always a trend of consumers advancing their purchases before the budget when a hike in duty is expected. It is visible now as well."