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Caution over GST dents auto sales in June

Author: IANS/Tuesday, July 11, 2017/Categories: Auto & Ancillary

Caution over GST dents auto sales in June

New Delhi (IANS) - Caution over the implementation of GST dented domestic passenger car sales during June, data showed. As per the data furnished by the Society of Indian Automobile Manufacturers (SIAM), domestic passenger car sales were lower by 11.24% 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 IANS 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. Sales in other sub-segments such as utility vehicles declined by 11.25% during the month with 49,547 units, while sales of vans plummeted by 10.72% to 11,957 units.

Domestic passenger vehicle sales edged lower by 11.21% in June to 198,399 units from 223,454 sold during the corresponding period in 2016. However, overall commercial vehicles' sales inched up by 1.44% 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% 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% to 1,527,049 units.

The industry data showed that the Indian automobile sector reported a marginal rise of 1.26% 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% 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."

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S Vijaykrishnan
S Vijaykrishnan


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