The domestic passenger vehicle industry has managed to put a brake sliding sales after two months as a combination of factors including lower fuel price and uncertainty over extension of excise cuts next year resulted in improved sales in November.
Car sales grew by 9.5% last month over the previous year, offsetting the 6.8% decline in the sale of multi-utility and sports utility vehicles. Overall sales of passenger vehicles, which includes cars, SUVs and vans, reported a 5.4% growth at 212,438 units in November.
In order to provide a stimulus to the industry, which declined in the last two financial years, the government had reduced excise duties across all segments in the budget in February. The cuts were extended till the end of the year by the new Modi government in June, but there is no word on whether these rates would continue beyond December.
“We have been witnessing an upswing in sales since November, when where we registered a growth of 19% in the domestic market. In December too, the level of customer enquires over the past 9 days has increased by 20% compared to the previous year,” said N Raja, senior vice-president and director, Toyota Kirloskar Motor Ltd. “On account of uncertainty over excise duty as well as over the price rise speculation from January 2015, we are expecting the trend will continue through the month of December.”
Hyundai said enquiries have hit the highest levels for a year.
“Customer confidence is on an increase as seen by the increase in interest towards purchases,” said Rakesh Srivastava, senior vice-president, Hyundai India. “Enquires and bookings are showing growth of around 20% over last year. We hope that this increased interest will lead to the intended purchase decision as these are the highest customer offers of the year.”
Traditionally, consumers prefer not to purchase vehicles in December. The vehicle’s resale value, which depends on the model year, suffers in the last couple of months of the year.