Reductions to tax paid on car purchase appear to have had little impact on India’s car market last month.
Market leader Maruti Suzuki reported domestic sales just 2% ahead of last year at 99,758 units.
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India’s government announced a temporary 4-percentage-point reduction to excise duty on cars that will last until June 30.
“Immediately, OEMs have passed on the duty benefits to buyers and reduced prices across models. We are, therefore, likely to see a temporary surge in volume in the next few months as buyers take advantage of the lower prices,” said Ammar Master, senior market analyst for India at LMC Automotive.
However, he also noted that there are other negatives at work in the Indian car market, including tighter lending conditions.
Nevertheless, LMC projects 6% growth to 3.11m units for India’s light vehicle market in 2014, helped by higher consumer interest on the back of new model launches at the recent Delhi auto show.
