HIGH GROWTH ON LOW BASE

Business Today - - THE BUZZ - Ra­jeev Dubey

IN­DIA’S CAR MAR­KET has been grow­ing at a healthy clip of 12-16 per cent per an­num. Pas­sen­ger ve­hi­cle sales in April – May this fis­cal have grown at 13.28 per cent. So what ex­plains the sud­den spurt of 28 per cent in pas­sen­ger car sales for the top 7 car mak­ers in June, 2018 over June, 2017? The big­gest – Maruti, grew by over 36 per cent, Tata by 54 per cent and M&M by 26 per cent. The an­swer lies in the low base-ef­fect. June, 2017 sales were par­tic­u­larly sub­dued as cus­tomers de­ferred pur­chases and deal­ers re­duced stocks due to the un­cer­tainty over the likely im­pact of GST in­tro­duc­tion from July 1, 2017. Not to for­get that the im­pact of DeMo on car sales was still lin­ger­ing since Novem­ber, 2016. The pre­vi­ous June, sales for the top 7 car mak­ers were down 17 per cent against the pre­vi­ous month, which made the June 2018 num­bers look far health­ier and un­usual than they are.

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