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As feared, Indian auto market witnessed slowest growth rate of 3.4 per cent for the April month after showing some hope in March 2012. In all 168,351 units were sold in April this year compared to last April’s 162,813 units as per data compiled by Society of Indian Automobile Manufacturers. June 2011 showcased the last lowest growth of mere 1.7 per cent.
The major reasons to blame for the dip in growth rate are costlier loans, increased car prices and soaring fuel prices after the 2012 budget session. Another strong reason is the awareness among car buyers about the expected impact of the budget and thus he shifts his buying plans to the last month of March. Car fleet buyers also tend to choose March as the most favorite month for their purchase to skip additional taxes.
Almost all the auto companies including Maruti Suzuki India Ltd, Hyundai Motors and others hiked their car prices by two per cent to pass on the burden of raised excise duty on customers.
Hitesh Goel, a Mumbai-based Kotak Institutional Equities Research’s analyst, said that the climbing rate in the cost of ownership has begun to show in the single digit growth of automobile market including the two-wheelers.
Also, the raise in crude oil rates have forced oil companies to increase fuel prices several times last year and along with recurrent interest rate hikes it acted as a fuel on fire and dashed the auto market growth rate of the country to the lowest in the last 10 months.
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