GST impact: Car sales decline 11 per cent on GST scare, says SIAM

Car sales dipped 11 per cent in June, the first decline in six months as automotive dealers postponed fresh stocks from the companies, ahead of GST implementation to avoid transitional loss and liquidate their existing supplies.

According to the data shared by Society of Indian Automobile Manufacturers' or SIAM, domestic passenger vehicle (PV) sales declined by 11.21 per cent to 1,98,399 units in June from 2,23,454 units in the same month last year.

Passenger cars sales had been steadily growing since January after recovering from currency demonetisation drive last year.  Hit by demonetization PV sales had fallen by 1.36 per cent to 2,27,824 units in December 2016 from 2,30,959 units in the year-ago month. The decline witnessed in June was the steepest fall in PV sales since March 2013, when sales fell by a massive 13.01 per cent.

SIAM Director General Vishnu Mathur told the media today, "Rationalisation of stock happened at both dealers and manufacturers during the month. We expect it to be just one month decline. Sales are expected to pick and should be in a higher single digit."

During the January-April quarter, PV sales rose by 4.38 per cent to 7,27,658 units. Domestic cars saw an increase of 3.89 per cent during the quarter.
Last month, passenger car market leader Maruti Suzuki India continued its domination in the domestic PV space by selling 93,057 units, representing a marginal growth of 1 per cent.  Arch rival Hyundai Motor India sold 37,562 units with a decline of 5.64 per cent followed by home grown Mahindra & Mahindra at the third spot with 16,169 units, down 5.27 per cent.

Tata Motors dispatched 13,148 units, down 12.19 per cent, while Honda Cars sold 12,804 units during the month, up 12.25 per cent.

The volume driven two wheeler segment, sales in June rose 4 per cent  to 1,527,049 units as compared to 1,468,263 units in the year-ago month. The larger chunk motorcycle sales last month rose 2.18 per cent to 964,269 units as against 943,706 units a year earlier.  "Rise in rural income and prospects of a good monsoon are driving motorcycle sales," SIAM deputy DG Sugato Sen said.

Segment leader Hero MotoCorp sold 12.49 per cent higher to 5,37,187 units during June as compared to 4,77,540 in the same month previous. Rival Honda Motorcycle and Scooter India (HMSI) sold 1,45,358 units last month as against 1,42,618 units in the same period of the previous fiscal, a growth of 1.92 per cent.

The overall commercial vehicles market grew 1.44 per cent in June 2017 as compared to the same period last year. Medium and heavy commercial vehicles declined 6.54 per cent, even as light commercial vehicles grew by 6.85 per cent in April-June 2017 over the same period last year. However, the sale of three-wheeler declined by a massive 24.75 percent in April-June 2017 over the same period last year.

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