New Delhi, May 10: Car sales grew just 3.4 per cent in April, the slowest in 10 months, as the impact of a post-budget price hike and high loan rates affected sales, particularly in the entry-level segment.
Domestic car sales stood at 1,68,351 units in April compared with 1,62,813 units in the same month last year, according to figures released by the Society of Indian Automobile Manufacturers (Siam) today. Growth rate in April was the slowest since June 2010 when sales rose 1.7 per cent.
"The growth in the last month was sober… it is the slowest in the last 10 months. The price hike that was done after the excise duty was raised in the budget and high interest rates have affected consumers' sentiment," Siam director-general Vishnu Mathur told reporters here.
Sales are usually hit in April because bulk purchases of cars and commercial vehicles take place in March, the last month of the fiscal, to save on depreciation costs. Several individual customers this year advanced their purchases to March to beat the price hike of April.
In Budget 2012-13, the government had hiked excise duty by 2 percentage points to 12 per cent, which every manufacturer passed on to customers.
Besides, different duties were raised depending upon the vehicles' engine and size specifications.
"Overall growth in the industry was subdued. The first six months are going to be tough because if we expect any industry-friendly monetary policy, it will happen in the second half only," Mathur said.