Fuel-efficiency will drive car sales

Automobile experts said that last week’s fuel price — and the spectre of more under a deregulated system — may lead many consumers to defer plans to buy a car. However, the price hike is unlikely to affect overall demand in a business that is booming.
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Updated on Jun 30, 2010 12:31 AM IST
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Hindustan Times | By, Mumbai

Automobile experts said that last week’s fuel price — and the spectre of more under a deregulated system — may lead many consumers to defer plans to buy a car. However, the price hike is unlikely to affect overall demand in a business that is booming. In May 2010, car sales across the country stood at 148,481 units, up by 30 per cent over the same period last year.

“In the short-term, consumers may take into account price, maintenance costs and budget overshoots. Eventually, once they realise that the price hike is here to stay, they will go back to their earlier habits,” said Abdul Majeed, auto practice leader, PricewaterHouseCoopers India.

It’s the small cars, which are the most fuel-efficient, that are poised to gain further in a market they already dominate.

“Small cars will gain as more and more buyers will look for vehicles that deliver better mileage. This trend will be popular not just in India, but also globally,” added Majeed.

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