After a two-month dip in the sale of automobiles, March may see a boom in business for auto dealers, said industry watchers.
Contrary to customer anticipation of reduction in car prices in the budget, auto majors are hinting at a price hike from April.
In addition to the existing 2 per cent levy, the finance minister also announced a cess of one per cent on all taxes of corporates and individuals to fund secondary and higher education for the financial year starting April 1, 2007. The expected deduction in certain taxes for the automobile sector did not happen. Therefore, most automobile manufacturers have announced a hike in prices, though the extent or model range is yet to be declared. However, said experts, a window period during March will probably be allowed by auto players to allow customers the pre-budget price advantage.
“We were planning to buy a family car. I was advised to wait for the budget after which prices are expected to fall. Now, I think we should hurry before prices rise,” said Sumit Das, a resident of Kadma.
This attitude among car buyers has come as a welcome relief after city auto dealers registered a dip of nearly 15-30 per cent in the two months of pre-budget sales.
“We have had a 15 per cent dip in the past two months for all our vehicles,” said Girish Mandal, general manager of Pebbco Motors, who are dealers for Maruti Suzuki.
High-end cars also registered low sales. “This has hit us hard as the market for high-end cars is more price-sensitive than for small cars,” said an auto dealer.
R.K. Nayak, manager in a Tata Motors dealership firm, said: “It is the high-end segment such as sports utility vehicles that was worst hit with about 30 per cent reduction in sales during February.” Sales of small cars such as Indica have only been hit by about five per cent, he added.
Cars ranging from Santro, costing Rs 3,00,000, to upmarket cars, costing up to Rs 17,00,000, have undergone a 16 per cent dip in the pre-budget sales, said P.K. Hazra, senior manager of sales in Fairdeal Hyundai.
Customer awareness has also contributed to low sales, said dealers. “Now customers wait and watch till the budget. The range of cars is also vast, so we are dealing with mature customers,” he said.
An additional factor that added fuel to fire is superstition. Members of many communities do not buy metal before Sankranti. Hence the auto companies lost out on business in the first half of January, added the dealers.
Contrary to customer anticipation of reduction in car prices in the budget, auto majors are hinting at a price hike from April.
In addition to the existing 2 per cent levy, the finance minister also announced a cess of one per cent on all taxes of corporates and individuals to fund secondary and higher education for the financial year starting April 1, 2007. The expected deduction in certain taxes for the automobile sector did not happen. Therefore, most automobile manufacturers have announced a hike in prices, though the extent or model range is yet to be declared. However, said experts, a window period during March will probably be allowed by auto players to allow customers the pre-budget price advantage.
“We were planning to buy a family car. I was advised to wait for the budget after which prices are expected to fall. Now, I think we should hurry before prices rise,” said Sumit Das, a resident of Kadma.
This attitude among car buyers has come as a welcome relief after city auto dealers registered a dip of nearly 15-30 per cent in the two months of pre-budget sales.
“We have had a 15 per cent dip in the past two months for all our vehicles,” said Girish Mandal, general manager of Pebbco Motors, who are dealers for Maruti Suzuki.
High-end cars also registered low sales. “This has hit us hard as the market for high-end cars is more price-sensitive than for small cars,” said an auto dealer.
R.K. Nayak, manager in a Tata Motors dealership firm, said: “It is the high-end segment such as sports utility vehicles that was worst hit with about 30 per cent reduction in sales during February.” Sales of small cars such as Indica have only been hit by about five per cent, he added.
Cars ranging from Santro, costing Rs 3,00,000, to upmarket cars, costing up to Rs 17,00,000, have undergone a 16 per cent dip in the pre-budget sales, said P.K. Hazra, senior manager of sales in Fairdeal Hyundai.
Customer awareness has also contributed to low sales, said dealers. “Now customers wait and watch till the budget. The range of cars is also vast, so we are dealing with mature customers,” he said.
An additional factor that added fuel to fire is superstition. Members of many communities do not buy metal before Sankranti. Hence the auto companies lost out on business in the first half of January, added the dealers.
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