India Car Sales Rise to a Record
NEW DELHI -- Car sales in India jumped to a record in February as customers bought more vehicles on concerns that the federal government may raise taxes on diesel vehicles in its budget for the next financial year.
Local car sales rose 13% last month, the steepest pace of growth since April 2011, to 211,402 autos from 186,890 autos a year earlier, helped mainly by persistent demand for diesel vehicles, data issued by the Society of Indian Automobile Manufacturers showed.
The February performance follows a 7.2% rise in January, an 8.5% increase in December and a 7.5% rise in November. The previous record for monthly car sales was in January, at 196,013 autos.
While demand for gasoline vehicles has been muted so far this fiscal year due to costlier loans and higher fuel prices, the slack has been picked up by a sharp rise in sales of diesel-powered cars and sport-utility vehicles. India's government continues to control prices of diesel, which is nearly 40% cheaper than gasoline due to its direct impact on inflation. Diesel vehicles are more fuel-efficient as well.
"Demand for diesel vehicles has grown to 45% of total demand from less than 30% last year," said SIAM Director General Vishnu Mathur.
SIAM expects car sales to remain brisk until March 16, when the finance minister would present the budget for the fiscal year that starts April 1.
Mr. Mathur said that consumer sentiment has improved on expectation that the central bank is unlikely to raise interest rates any further in the near term, which would help stabilize the cost of purchasing vehicles. But he added that any increase in the tax on diesel cars could dent sales.
February car sales growth was helped by better performance at Maruti Suzuki India Ltd., Hyundai Motor Co., Tata Motors Ltd. and Toyota Motor Corp. However, Ford Motor Co., General Motors Corp. and Volkswagen AG were among the companies that posted lower sales.
Sales of market leader Maruti, the local...