Car sales rose 1.4 per cent in February after four months of decline, fuelled by a cut in excise duty and strong demand for Maruti and Honda cars.
Sales rose to 160,718 cars in February, up from 158,512 a year earlier, according to data released by the Society of Indian Automobile Manufacturers (SIAM) here.
SIAM, however, maintained a cautious outlook, noting that it was too early to say if the marginal 1.4 per cent growth had reversed the negative trend.
"It will take some more time to see if the negative trends have reversed. We are getting feedback from companies that footfalls have increased," SIAM Director General Vishnu Mathur told reporters here.
Finance Minister P Chidambaram had last month lowered excise duty on small cars, motorcycles, trucks and buses to 8 per cent from 12 per cent. The levy on SUVs was cut to 24 per cent from 30 per cent. Taxes on compact cars and sedans were also reduced to 20-24 per cent.
Car companies responded by dropping their price tags to pass on the reductions to customers, resulting in a rise in sales.
"Month after month, numbers are so volatile, there is so much fluctuation that there is no trend visible," Mathur said.
During the April-February period of this financial year, car sales declined 4.6 per cent while the broader passenger vehicle segment witnessed a fall of 5.9 per cent.
"The current fiscal is going to end on a negative for passenger and commercial vehicles. Even if sales are much better in March, it won't be able to erase the effect of rest of the fiscal, which has been largely negative," Mathur said.
