Car sales in India grew just 2.3% year on year in February as customers put off purchases expecting a cut in taxes in the federal budget.

In the month, 94,756 cars were sold, up from 92,618 in February 2007, Society of Indian Automobile Manufacturers (SIAM) data said, according to Reuters.

"The industry had witnessed muted growth in January and February, primarily due to postponement of purchases by consumers in anticipation of sops extended for the industry," brokerage Prabhudas Lilladher reportedly wrote in a note to investors.

In both December and January, annual growth was about 9%, Reuters noted.

The news agency said finance minister Palaniappan Chidambaram on 29 February reduced excise duty on small cars, two-wheelers and buses to 12% from 16% in his budget speech, prompting automakers to cut prices on some models.

Maruti Suzuki India sales rose 2.2% to 51,762 units while Hyundai Motor sales fell 5.5% to 14,591 units and Tata Motors volume was off 16% to 13,451 units, Reuters said.

Sales of trucks and buses rose 1.7% to 45,059 units from a year ago, and analysts told Reuters the budget cut in excise duty on these vehicles would further boost demand.