GST impact: Car sales decline 11 pc in June

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SME Times News Bureau | 11 Jul, 2017
Domestic passenger car sales lower by 11.24 percent in the month of June as caution prevailed over the GST implementation, informed the Society of Indian Automobile Manufacturers (SIAM) in New Delhi on Monday.

As per the data, domestic passenger car sales were lower by 11.24 percent last month to 136,895 units from an off-take of 154,237 units in June, 2016.

Sugato Sen, Deputy Director General of SIAM, told news agency that last month's sales were impacted as caution prevailed over the GST implementation.

"The decline in last month's sales was an aberration. We expect that sales will regain momentum very soon," Sen said.

According to the data, the off-take of other sub-segments such as utility vehicles declined by 11.25 percent during the month with 49,547 units, while sales of vans plummeted by 10.72 percent to 11,957 units.

Industry data revealed that domestic passenger vehicle sales edged lower by 11.21 percent in June to 198,399 units from 223,454 sold during the corresponding period in 2016.

However, the data showed that the overall commercial vehicles' sales inched up by 1.44 percent to 56,890 units in June. The segment is a key indicator of economic activity.

Similarly, the three-wheelers segment's off-take also receded. It declined by 24.56 percent to 36,491 units during the month under review.

In contrast, the overall sales of two-wheelers, which include scooters, motorcycles and mopeds, increased by four percent to 1,527,049 units.

The industry data showed that the Indian automobile sector reported a marginal rise of 1.26 percent in June 2017 -- with total sales at 1,818,829 units across segments and categories.

Moreover, the overall exports across categories increased by 5.46 percent to 297,918 units during last month.

Sector analysts observed that customers' decision to postpone purchase due to uncertainty of pricing post-GST implementation was another factor in decline of sales for June.

"Customers are expecting prices to decrease across all the segments under GST," said Abdul Majeed, Partner - Price Waterhouse and an auto expert.

"Rural demand is slowly coming back on track, which is helping the two-wheeler segment. Hopefully, the demand will bounce back in the coming months."