Waiting list for cars to rise post-duty cut

The much-awaited excise duty cut on small cars to 12 per cent (from 16 per cent) made by the finance minster may have brought smiles on the faces of car manufacturers but this, dealers say, will increase the waiting period on some popular models by another additional month.

Some of the most commonly demanded models in the market include Maruti's Swift, Zen Estilo, Chevrolet Spark and Skoda's Fabia. All models are currently carrying a waiting period of about one to three months.

Making things worse, India's largest car manufacturer Maruti Suzuki, General Motors-owned brand Chevrolet and Czech car-maker Skoda are facing capacity constraints at their respective plants due to which increasing production is not possible.

For instance, Maruti Suzuki's production tally will not go beyond 66,000-68,000 units a month, say experts, as the company has been operating at a near 100 per cent capacity for the past few months, producing 62,000-63,000 units a month.

The company is trying to push export sales, which contributes about 7-8 per cent of the total production. The export figure has been growing in double digit rates even as domestic sales have grown in single digit during the past few months.

Vijay Sarthy, auto analyst, JM ASK Securities, said, "The company is not able to produce beyond a certain point due to limited production. At the maximum, it is able to produce just 66,000-68,000 units a month, which does not satisfy the demand."

Maruti recorded its lowest monthly growth this year in February, which was less than 1 per cent.

Dealers, however, were not ready to go on record but the trend is clearly discernible.

A Mumbai-based Maruti dealers said, "We are able to satisfy demand for cars like Alto, M800, Wagon R but Swift and Estilo buyers are forced to wait from a month to two months. But with the excise duty cut the waiting period is expected to go up by at least another month."

The hot-selling Swift diesel is having a waiting period of two to three months, costing Rs 5.71 lakh (on-road Mumbai) after the excise duty reduction.

This wait, dealers expect, will climb to four months in the coming weeks.

GM's best-selling model Spark has been well received in the market thanks to attractive pricing by the company.

Ankush Arora, VP (marketing and sales), General Motors, said, "There is a waiting period of a little more than a month on the Spark model but we are hopeful that it will not escalate after the duty cut."

However, a leading GM dealer in Mumbai said that the waiting period range from one to two months as the vehicle is very much in demand.

"We have received a lot of enquiries since the duty cut. The time frame to deliver the car may go beyond two-and-a-half months to three months in the next few weeks."

Similarly, Skoda's hatchback Fabia, which is priced Rs 7.23 lakh (on-road Mumbai) has a waiting period of two to two-and-a-half months on the premium variant of the car.

A Skoda dealer said that the Rs 18,000 cut on the car for the diesel model would push the waiting period to beyond three months.