India's top carmaker Maruti Suzuki India Ltd saw sales rise 3.3 per cent in March , though lower than those of rivals Tata Motors Ltd, India's largest vehicles maker and Mahindra & Mahindra Ltd, the top utility vehicles maker, as both reported their highest-ever monthly sales.
Car sales in India were boosted as people rushed to buy cars before excise tax hikes announced in the budget last month started impacting prices. Carmakers had said prices would rise by around 1.5 per cent as a result.
The Indian government's decision to not hike the price of diesel or levy a tax on diesel vehicles also benefited carmakers in India. Demand for diesel vehicles has risen steeply and now makes up for around 40 per cent of sales of new cars thanks to subsidies that make the fuel around 50 per cent cheaper than petrol. (See: Diesel tax may hit diesel car sales: analysts)
Maruti, 54.2-per cent owned by Japan's Suzuki Motor Corp, sold 125,952 vehicles in March, which included 13,228 vehicles for export, ending a disappointing year on a positive note after widespread strikes at its factories and a slowdown in India's car market.
For the fiscal year that ended in March, Maruti's sales were down 10.8 per cent.
High interest rates and rising fuel prices adversely impacted the Indian market in the first nine months of the fiscal year, and total industry sales for the full year are expected to only marginally beat last year's sales.
Tata Motors, maker of the Nano, the world's cheapest car, posted a 20-per cent jump in March sales to break the 100,000 vehicle mark for the first time, while Mahindra, India's biggest SUV maker, reported an increase in sales of 25 per cent to their highest-ever level.
According to Tata, the dominant player in commercial vehicles, sales for the fiscal year were up 13 per cent, while Mahindra's sales grew 28 per cent.