New Car Sales Plunge Below 1,000 for 3 Months after Post Budget Hike

New vehicle registrations have dropped dramatically since August, remaining below 1,000 units per month, following the introduction of new fiscal measures in the 2025-26 Budget.The National Land Transport Authority (NLTA), in figures released in November, confirmed a sharp slowdown in the sale of new vehicles over the past few months. According to Mrinal Teeluck, Secretary-General of the Motor Vehicles Dealers Association (MVDA), this is directly due to the new fiscal measures which have “strongly impacted the sector.”

The trend shows a drastic decrease in sales, with registrations failing to reach 1,000 vehicles in a single month since the Budget’s effect began to be felt.

Key Figures and Sales Drop

The figures for new vehicle registrations show a clear decline after a record high in June:

• June: 3,743 (Record month)
• July: 1,895
• August: 948
• September: 911
• October: 916

Before the peak in June, monthly sales had regularly exceeded 1,400 vehicles.

Government Measures and Industry Response

The government introduced measures to increase the cost of acquiring and owning a vehicle in response to the continuing expansion of the vehicle fleet, which is cited as a source of congestion, accidents, and multiple urban challenges.

Measures included:

• An increase in the road tax, which had been unchanged for nearly 15 years.
• Increased excise duties on hybrid and electric vehicles to align taxation with the rising cost of living.
• The removal of registration fees on local used vehicles to promote domestic sales and limit the inflow of new imported vehicles.

Despite this measure, registrations of imported used vehicles remain low, falling from 2,525 in June (a month marked by a massive influx before the budget measures took effect) to only 652 in October.

The MVDA Secretary-General, Mr. Teeluck, also advocated for action to modernise the fleet, stating that there is a need to “accelerate the withdrawal of old vehicles to rejuvenate and clean up the fleet,” as “not enough old vehicles are being removed from our roads.”

Expanding National Vehicle Fleet

The slowdown in sales occurs despite the overall vehicle fleet continuing to grow.

• 400,919 in 2011
• Over 500,000 in 2016
• 600,000 in 2020

Source: l’Express