By APA Bureau:
On the onset of July, 2017 India rose to the Goods and Service Tax (GST) regime which left a mixed impression on the people of the country. For the automotive industry, June, the month before GST was to be implemented, was a period of cautious actions. Domestic sales of passenger vehicles fell steeply owing to the confusion over tax implication and unsold inventory.
However, for the first quarter of the current fiscal (April –June), passenger vehicle sales grew four percent to 727,658 units compared to 697,154 units in the same period a year ago.
According to the latest numbers released by the Society of Indian Automobile Manufacturers (SIAM), 198,399 units of passenger vehicles were dispatched in June 2017 compared to 223,454 units dispatched in the same month a year ago, a decline of 11.21 percent. Sales by most of the vehicle manufacturers declined in June.
The dispatches were low despite the discounts offered by the vehicle manufacturers. In the coming months the passenger vehicle segment is expected to do well owing to price cuts after GST. Pay out of the Seventh Pay Commission also will help. “The PV market is expected to continue its growth of 7-9 percent during FY 2018,” Vishnu Mathur, Director General of SIAM, said.
India’s largest PV maker by volume Maruti Suzuki India registered a marginal single-digit growth in June 2017. The company slipped to an early single-digit of 1.2 percent in June 2017 at 93,263 units against 92,133 units during same month last year.
In June 2017, Hyundai Motor India (HMIL) domestic sales fell 5.6 percent to 37,562 units compared to 39,807 units in June 2016. “In a challenging market with speculations on GST structure, Hyundai registered its highest ever half year domestic sales at 2,53,428 units with a growth of 4.1percent on account of strong acceptance of super performer brands Grand i10, Elite i20 and Creta in pre-GST business environment. We expect a positive demand pull after the implementation of GST in the coming months as industry will witness heightened level of customer interest in a seamless unified single market,” Rakesh Srivastava, Director, Sales and Marketing, HMIL, said.
Tata Motors’ domestic passenger vehicle sales declined 10 per cent to 11,176 units in June 2017 compared to 12,509 units sold in June 2016. “Mixed consumer sentiment in June 2017 towards the implications of GST has impacted the passenger vehicle business while the commercial vehicles business grew on month-on-month basis, due to BS-IV production ramp-up,” the company sources said.
Honda Cars India reported that its domestic sales grew 12.2 per cent in June, 2017 to 12,804 units from 11,407 units sold in the corresponding month last year. “HCIL conducted a price protection in June to those customers who purchased cars before GST roll out to counter the sales challenge during pre-GST period. It helped us maintain good sales numbers. We foresee that GST, good monsoon forecast and upcoming festive season will further improve the buyer sentiment,” Yoichiro Ueno, President and CEO, Honda Cars India, said.
Ford India reported 35 percent fall in domestic wholesale in June 2017 to 6,149 vehicles from 9,469 units in June 2016. “Leading up to the biggest tax reform, June 2107 saw moderate wholesale as the industry looked to protect itself from the possible impact. However, GST is a step in the right direction, and expected to strengthen economic growth,” Anurag Mehrotra, Managing Director, Ford India, said.
Indian Utility Vehicle manufacturer Mahindra & Mahindra witnessed a drop of eight percent in total sales to 35,716 vehicles, from 39,009 vehicles during June 2016.
Toyota Kirloskar Motor (TKM), awaiting clarity on GST, did not dispatch large number of vehicles. The company witnessed 85 percent decline in domestic sales to 1,973 units for June 2017 compared to 13,502 units dispatched in the same month a year ago. The PV segment (which includes UVs, cars and vans) sold 16,170 vehicles in June 2017, down five percent. The company’s total domestic sales stood at 33,861 vehicles during June 2017 down by three percent.
Inclusive of all categories the automobile sales grew marginally 1.26 percent in June, 2017 to 1,818,829 units compared to 1,796,172 units in the same month a year ago.
The commercial vehicle segment, especially in the medium and heavy segment, has started showing signs of recovery as the after-effects of the advance buying due to the enforcement of the BS-IV emission norms from April 1 has started wearing off.
Light commercial vehicles continued their growth, but OEMs experienced both hits and misses in the overall CV category sales due to the impact of the impending GST in June, 2017. M&HC segment declined 6.54 percent to 21,175 units compared to 22,656 units sold in June 2016. LCV recorded a growth of 6.8 percent at 35,715 units dispatched in the June 2017 as against 33,426 units dispatched in the same month last year.
Overall commercial sales in June 2017 grew marginally 1.44 percent to 56,890 units in June compared to 56,082 units dispatched in the same month last year.
Ashok Leyland reported 11 percent growth in domestic CV sales in June, 2017 at 12,330 units compared to 11,108 units a year ago. Tata Motors commercial vehicle sales declined in the same comparative period by 1.89 percent to 25,678 units dispatched last month. Volvo Eicher Commercial Vehicle sales also declined 20.55 percent in June 2017 to 3,921 units compared to 4,935 units sold previous year.
Mahindra & Mahindra commercial vehicle sales in June 2017 grew 11.77 percent to 15,131 units compared to 13,538 units in the same month last year.
Two-wheeler sales grew four percent in June to1,527,049 units, while three-wheeler segment saw steepest decline of 24.5 percent in the same period. With increasing urbanization, the demand for scooters continues to lead the two-wheeler segment.
Scooter sales in June, 2017 stood at 497,478 units compared to 449,807 units sold in the same month previous year, while motorcycle sales grew 2.18 percent to 964,269 units in June 2017 from 943,706 units in the same month last year. In the three-wheeler segment passenger carrier saw the steepest fall of 29.19 percent to 28,229 units in June 2017, compared to 39,867 units sold in the same month a year ago. The three-wheeler goods carrier declined 2.8 percent to 8,262 units.