Howrah News Service -  Latest news and headlines on Howrah,West Bengal and World: High oil will hurt car sales

High oil will hurt car sales
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newsbyte on 04 June, 2008 02:56:48
 
By Anandan Kerachan
Chennai
June 4: The fuel price hike announced by the Centre on Wednesday will have a
negative impact on the car sales, especially, on the low-end cars.
Mr Ajay Parmar of Emkay Share Broking said, "There will be a negative impact on
sales, but it won’t be a panicky situation. Someone planning to buy a car,
especially lower-end, might think about the maintenance costs." However, the
industry is not expecting any slide in higher end car sales.
Reacting to the price hike, Hyundai’s senior vice-president, Mr Arvind
Saxena, said, "The current price hike has aggravated the woes of Indian
consumers already reeling under high inflation. This move would further dampen
the demand for new cars, as the industry is already under pressure because of
the higher interest rates and the steep rise in input costs."
He sees high fuel costs to shift the demand pattern towards smaller and more
fuel-efficient cars.
Raising similar concerns, a Maruti spokesperson said, "Sales will gradually
recover. People will opt for more fuel-efficient cars."
The interesting part is that all leading carmakers have recently raised prices
and will try to hold it.
While the petroleum secretary, Mr M.S. Srinivasn, confessed that the hike would
have inflationary impact of 0.5 to 0.6 per cent, analysts expect it will lead
inflation into double digits.