Hike in petrol, diesel prices fails to dampen car sales
Car sales have been upbeat despite the numerous hike in the prices of petrol and diesel.
Petrol and diesel prices have been on the rise since November 2015 which have added to the woes of vehicle owners. On Tuesday petrol prices were hiked by Rs 2.58 per litre and diesel by Rs 2.26 per litre.
With this change, the price of petrol in Delhi will be Rs 65.60 per litre (including State levies), while one-litre diesel will cost Rs 53.93. The prices will be revised correspondingly in other states as well.
This is the third hike in rates this month. On May 17, the petrol and diesel price was increased by Rs 83 paise per litre and Rs 1.26 per litre respectively. Before that, on May 1, the fuel rates were hiked by Rs 1.06 per litre on petrol and Rs 2.94 per litre on diesel.
Many would think that these hikes in the price of petrol and diesel would dissuade anyone from buying cars. Wrong!
Car sales have been upbeat despite the numerous hike in the prices of petrol and diesel. Which proves again that petrol and diesel price hike had no bearing on car sales. This comes as good news to car manufacturers as fuel prices keep on rising in the country.
For instance, the month of May, which witnessed three price hikes, also saw top automobile companies post nearly healthy double-digit growth figures. While Maruti Suzuki posted 10.55% growth in May, Hyundai Motor grew by 10.42%, Mahindra grew by 8.27%, Toyota Kirloskar Motor grew by 5.99%, Renault India posted 131.69% growth and Ford India grew by 22.30%. Only Honda Cars posted a decline of 25.89% during the month.
In November 7, 2015 the prices of petrol was hiked by Rs 1.6 per litre and diesel by Rs 0.3 per litre, according to a Financial Chronicle report. However, sales grew by 9.5% during the month, according to data from the Society of Indian Automobile Manufacturers (SIAM).
The same was seen in December 2015 as domestic car sales grew by robust 12.87% despite a hike of Rs 0.3 per litre on petrol and Rs 1.17 per litre on diesel on December 17.
Car sales in January this year dropped marginally by 0.72%. There were three hikes in the prices of petrol and diesel during the month. However, this drop in sales was on account of the end of the excise duty benefit which brought up the prices of cars during the month.
On January 2 prices of petrol rose by Rs 0.37 per litre and diesel Rs 2 per litre, January 16 prices of petrol increased by Rs 0.75 per litre and diesel by Rs 2 per litre, and January 30 prices of petrol rose by Re 1 and diesel by Re 1.5.
Prices have been on the rise despite global oil prices slumping to $46.88 a barrel in May 2016 from it highest point at $106.85 a barrel exactly two years ago. The reason for this being the Centre increasing excise duty on the petroleum products nine times in the last two years, said the Financial Chronicle report.