GST speculation affected sales of major auto firms in June


New Delhi: The country’s largest car maker, Maruti Suzuki India Ltd (MSI), on Saturday posted a 1.2% rise in domestic sales in June but rivals Hyundai, Tata Motors and Mahindra reported a decline during the month impacted by speculation over the GST tax structure.

MSI said it sold 93,263 units in June as against 92,133 units in the same period last year although sales of mini segment cars, including Alto and WagonR, declined by 7.9% to 25,524 units in June from 27,712 in the year-ago month. The company said sales of compact models comprising Swift, Estilo, Dzire, Baleno and Ignis rose 1.3% to 40,496 units last month as compared to 39,971 units in June last year. Utility vehicles, including Ertiga, S-Cross and Vitara Brezza, saw sales rise by 43% to 13,879 units in June, from 9,708 in the year-ago period.

Vans, including Omni and Eeco, saw sales dip by 6.7% to 9,208 units last month compared to 9,874 units in the same period of the previous year. Hyundai Motor India Ltd (HMIL) reported a 5.6% decline in domestic sales at 37,562 units in June. The company had sold 39,807 units in June 2016. HMIL director, sales and marketing, Rakesh Srivastava, said the market was challenging, fuelled with speculations on the GST tax structure. The company expects a positive demand pull, post successful implementation of the GST, in coming months as the industry will witness heightened level of customer interest in a seamless and unified single market, he added. Tata Motors said its domestic passenger vehicles sales were impacted by the mixed reactions towards GST resulting in low buying sentiments.

Passenger vehicle sales during the month were at 11,176 units, down 10% from 12,482 units in June 2016. “This drop in volume is seen temporary and will be recovered in the quarter to come based on 11% growth in April-June 2017 quarter compared to the last year,” Tata Motors said in a statement. Utility vehicle major Mahindra & Mahindra (M&M) also reported a 3% decline in domestic sales at 33,861 units last month. Exports of the Mumbai-based automaker were down 54% at 1,855 units in June against 4,020 units in the same month last year. Sales of passenger vehicles, including Scorpio, XUV500, Xylo, Bolero and Verito, declined 5% at 16,170 units compared to 17,070 units in the same month last year. Commercial vehicle sales were, however, up 12% at 15,131 units in June against 13,538 units in the year-ago period.

M&M president, automotive sector, Rajan Wadhera, said the company’s focus has been to minimize channel stocks to reduce the transition losses on account of GST implementation. “We are closely observing GST and strongly believe that once we tide over the initial uncertainties, GST is set to usher in a new era for the economy in general and the automotive industry in particular,” he added.


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