Car buyers in India can still benefit as dealers rush to clear inventory

Even as car manufacturers have hiked prices in the aftermath of the imposition of the infrastructure cess following the Union Budget 2016-17, the real-world situation in showrooms remains largely unruffled and calm. In fact, it would be a good time to buy a new car.

Most of the car dealerships this correspondent visited today in New Delhi were still selling their old inventories at earlier rates till 10 March. While agreeing that some sales are bound to be impacted by the price hike, they maintain that a buyer will anyway purchase the vehicle.

Drawing an interesting comparison of a petrol hike from Rs 57 per litre to Rs 62 and beyond in Delhi, one retailer queried, “Do you stop refuelling your car or stop driving it around just because the fuel price has risen or fallen?”

In South Delhi, Rana Motors, which markets Maruti Suzuki cars, says there has been no decrease in footfalls, enquiries or bookings post Budget. Their new stock will arrive on 11 March at new prices and only then can a clearer impact of the price be gauged. 

However, a sales executive at the showroom points out that March typically is a fast-moving month for Maruti as it is the wedding season when people could be gifting cars. Moreover, it marks the end of the financial year when people are closing their account books and adjusting for depreciation. Hence, the price hike has not been factored into their sales at present.

The Volkswagen India showroom, in south Delhi, has also not experienced much of a post-Budget sales impact as it has limited sales of 35-40 cars a month comprising mainly of the Polo and Vento. Its old stock is yet to be exhausted. Until then the new, marked-up cars will not arrive.

At a rough estimate, Honda cars have become costlier by Rs 4,000-Rs 80,000 starting with the Brio at the lower end of the hike and the CR-V bearing the highest raise of Rs 66,500 – Rs 79,000. The Eon hatchback from Hyundai Motor India starts its price step-up at Rs 2,889 with the Santa Fe taking the brunt of the hit with a Rs 82,906 escalation.

Maruti has raised the ex-showroom prices of its models in the range of Rs 1,441 to Rs 34,494. But its hybrid Ciaz SHVS and hybrid Ertiga SHVS remain untouched as smart hybrids and electrics have been exempted from the infrastructure cess.  

General Motors has passed on the cess to consumers on Chevrolet cars ranging between Rs 3,500 and Rs 51,000.

At present the industry equation is skewed towards 55 percent petrol and 45 percent diesel.