PV sales down 11.2% in June on pre-GST jitters

Passenger vehicle sales fell over 11% in June—the first decline in six months—as dealers avoided picking up fresh stocks from companies ahead of GST implementation, with a view to avoid transitional loss.

Domestic passenger vehicle sales declined 11.21% to 1,98,399 units in June from 2,23,454 units in the same month last year, according to data released by the Society of Indian Automobile Manufacturers (SIAM).

Although PV sales have been growing continuously since January after recovering from demonetisation last year, the decline witnessed in June was the steepest fall in PV sales in 51 months, since March 2013, when sales fell by 13.01%. Car sales were down 11.24% to 1,36,895 units as against 1,54,237 units in June last year.

It was the steepest fall in 49 months, since May 2013, when car sales had fallen by 11.7%. “Rationalisation of stock happened at both dealers and manufacturers during the month. We expect it to be just one month kind of a thing,” SIAM Director General Vishnu Mathur told reporters here.

Dealers were more focused on liquidating stocks rather than picking up fresh units during the month to avoid transitional loss, he added. During the January-April quarter, PV sales rose 4.38% to 7,27,658 units. Domestic cars saw an increase of 3.89% during the quarter.

“After demonetisation last year, GST impact was one-of-a -kind of situation. We expect to come out of it soon as people have now come to know about the taxes and rates,” SIAM Deputy Director General Sugato Sen said.

Hit by demonetisation, PV sales had fallen by 1.36% to 2,27,824 units in December 2016 from 2,30,959 units in the yearago period.

When asked if SIAM would revise its growth forecast for the ongoing fiscal for passenger vehicles, considering the the GST impact, Sen said the industry body hasn’t looked at the matter yet. “We would like to track the market for next few months before committing anything,” he said. SIAM has given a outlook of 7-9% growth in the PV segment for the current fiscal.

Last month, market leader Maruti Suzuki India continued its domination in the domestic PV space by selling 93,057 units, representing a growth of 1%.

Rival Hyundai Motor India sold 37,562 units with a decline of 5.64% followed by home grown Mahindra & Mahindra at the third spot with 16,169 units, down 5.27%.

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