The expected recovery in demand after a 4% reduction in excise duties across categories in the automobile sector was painfully slow as most major carmakers including Maruti, Hyundai, Toyota, Tata Motors and Mahindra registered below par sales in February.
Market leader Maruti reported a dismal 1.8% rise in sales last month even though it launched a new small car Celerio during the month. Similarly, Korean auto giant Hyundai witnessed flat sales while Tata Motors saw a 6.7% increase on the back of very low sales in February last year.
Manufacturers, however, said they have seen a spike in the level of enquiries at the showrooms in the last 10 days.
“Post the reduction in excise duty, enquiry inflow has increased and we expect that this would lead towards creation of a positive momentum,” said Rakesh Srivastava of Hyundai Motor India Ltd.
Utility vehicle majors M&M and Toyota registered decline in sales belying hopes of a rebound in sale of SUVs that attracted a 6% reduction in duties.
“The excise duty cut was a welcome step to revive sale,” said N Raja of Toyota Kirloskar Motor Ltd. “However, other factors like high interest rate, falling rupee and unstable fuel pricing still loom large in the market.”
The only companies to buck the trend were Honda and Ford largely due to the success of new models like Amaze, City and EcoSport respectively.
“The reductions in excise duty should provide a positive message to customers and encourage them to make the most of the outstanding value being offered on our smart, safe and fuel efficient products,” said Vinay Piparsania of Ford India.