Post GST price cuts, auto makers report strong sales in July

New Delhi: Major automobile makers today reported robust sales growth across segments driven by price reductions and restocking of vehicles at dealerships post GST implementation.

Led by market leader Maruti Suzuki India, passenger vehicles segment witnessed strong growth last month with other companies such as Tata Motors, Mahindra & Mahindra (M&M), Ford India and Honda Cars India also registering double digit expansion in domestic market sales.

Maruti Suzuki India (MSI) posted a 22.4 per cent increase in domestic sales at 1,54,001 units as against 1,25,778 in July 2016. The company’s growth was driven by compact segment — comprising Swift, Estilo, Dzire, Baleno and Ignis — which saw a 25.3 per cent increase to 63,116 units in July as against 50,362 units in the same month last year.

Last month, sales of mini segment cars, including Alto and WagonR, went up 20.7 per cent to 42,310 units, from 35,051 in the year-ago month, MSI said in a statement. Tata Motors said its passenger vehicles sales in the domestic market grew 10.23 per cent to 14,933 units last month as against 13,547 in July last year.

There was an an improved customer buying sentiment post Goods and Services Tax (GST), Tata Motors President, Passenger Vehicles Business Unit, Mayank Pareek said. Likewise, Ford India also reported a rise of 18.96 per cent in its domestic sales at 8,418 units last month as against 7,076 units in July last year.

Stating that there was administrative challenges associated with the introduction of GST in July, Ford India President and Managing Director Anurag Mehrotra said, adding that going ahead there will be short-term headwinds associated with GST and rising input costs.

“We believe a good monsoon, conducive financing rates and consumer confidence during festival season will provide a good impetus for the industry,” he said. Homegrown utility vehicles major M&M saw a 13 per cent increase in its domestic sales at 39,762 units last month compared to 35,305 units in July 2016.

A good monsoon, successful GST rollout and a good run-up to the festive season gives the company confidence of achieving robust growth in second quarter, M&M President Automotive Sector Rajan Wadhera said.

Honda Cars India Ltd (HCIL) posted a 21.74 per cent increase in its domestic sales at 17,085 units in July. It had sold 14,033 units in the same month last year, HCIL said.

“The post-GST price benefits, healthy monsoon and onset of festive season in many regions from August will give another boost to our sales,” HCIL President and CEO Yoichiro Ueno said.

The country’s second largest carmaker, Hyundai Motor India Ltd (HMIL), however, reported a 4.38 per cent increase in its domestic sales at 43,007 units in July. The company had sold 41,201 units in July 2016.

HMIL Director Sales and Marketing Rakesh Srivastava said that strong support from the lowering of prices on account of GST implementation and good monsoon would increase customer confidence and sentiment towards vehicle buying.

In the commercial vehicles segment, Tata Motors said its domestic sales were up 15 per cent at 27,842 units last month following ramp-up of BS-IV production across segments.

“Passing on the benefits of GST to consumers by reducing the prices of its vehicles across all commercial vehicle segments has resulted in improved consumer sentiments,” Tata Motors Head ? Commercial Vehicle Business Unit Girish Wagh said.

Hinduja Group flagship firm Ashok Leyland reported a 14.19 per cent increase in total sales at 11,981 units in July as against 10,492 units in the same month last year. In two-wheeler segment, market leader Hero MotoCorp reported a 17.13 per cent increase in sales at 6,23,269 units in July as against 5,32,113 units in July 2016.

Despite sluggish sales for the first few days of the month due to the transition to the GST, the company said it was able to clock a robust six-lakh plus sales in July. Similarly, Honda Motorcycle and Scooter India (HMSI) today also posted a 19.96 per cent increase in total sales at 5,44,508 units last month. It had sold 4,53,884 units in the same month in July 2016.

Chennai-based TVS Motor Company saw its total sales in July grow by 9.34 per cent at 2,71,171 units as against 2,48,002 units in the same month last year.
Likewise, niche bike maker Royal Enfield, reported a 20.75 per cent increase in total sales at 64,459 units as compared to 53,378 units in the same month last year.

Farm equipment maker Escorts Ltd said its domestic tractor sales during the month were at 5,275 units as against 3,953 in July last year, a growth of 33.4 per cent. On the other hand, M&M registered a 7.48 per cent increase in its domestic tractor sales at 17,682 units as against 16,452 units in the year-ago month.