July turned out to be a good month for automakers on the back of the rollout out of the Good and Services Tax at the start of the month, putting an end to uncertainty surrounding the new tax regime.
Market leader Maruti Suzuki posted a 22.4% increase year-on-year in domestic sales to more than 1.54 lakh units, driven by strong demand for utility vehicles, including the Gypsy, Ertiga, S-Cross and Vitara Brezza. The sale of these vehicles rose 48% to 25,781 units.
Sales in the compact segment — Swift, Celerio, Dzire, Baleno and Ignis — rose 25.3% to 63,116 units in the last month, while that of mini-segment cars (Alto and WagonR) increased 20.7% to 42,310 units. Ciaz sales climbed 23.5% to 6,377 units.
‘Monsoon impact’
Honda Cars too posted a growth of 22% during the month, selling 17,085 units in the domestic market. “The post-GST price benefits, healthy monsoon and onset of festive season in many regions from August will give another boost to our sales,” Yoichiro Ueno, President and CEO, Honda Cars India said.
The company sold 4,894 units of WR-V, 4,854 units of City, 2,913 units of Amaze, 2971 units of Jazz.
“The July numbers are pretty good,” said Abdul Majeed, partner, PwC India. “With the Good and Services Tax rolling out from July 1, the uncertainty surrounding the new levy is gone, so the sales from manufacturers to the dealers has gone up,” he said.
For Hyundai, growth stood at 4.4% with sales of 43,007 units. Rakesh Srivastava, director, sales and marketing, said lowering of prices on account of GST and a good monsoon were likely to increase customer confidence and sentiment towards vehicle buying.
Homegrown firm Tata Motors said its passenger vehicles sales in the domestic market stood at 14,933 units, rising 10% on the back of strong demand for Tata Tiago and Tata Tigor. The company’s president, passenger vehicles business unit, Mayank Pareek, said the growth was helped by an improved customer-buying sentiment post GST. Its commercial vehicles sales in the domestic market rose 15% to 27,842 units.
Ford India said it sold 8,418 vehicles in July 2017 as against 7,076 units in the year-earlier month “despite the administrative challenges associated with the introduction of GST in July… Going forward, while there will be short-term administrative headwinds associated with GST and rising input costs, we believe a good monsoon, conducive financing rates and consumer confidence during the festival season will provide a good impetus for the industry,” said Anurag Mehrotra, president & managing director, Ford India.