Pre-GST discounts, rural demand buoy automobile sales

"Exports too have done well, as OEMs see this space as a serious alternative to utilise the overall capacity," an expert said.
Pre-GST discounts, rural demand buoy automobile sales
Pre-GST discounts, rural demand buoy automobile sales
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 Pre-GST discounts and a pick-up in rural demand buoyed automobile demand for June, as companies came out with broadly positive sales figures.

"The broadly positive sales numbers were backed up by pre-GST discounts and pick-up in rural demand due to prediction of a healthy monsoon and farm loan waivers in large states," Abdul Majeed, Partner - Price Waterhouse and an auto expert, told IANS.

"Exports too have done well, as OEMs see this space as a serious alternative to utilise the overall capacity."

According to Shrikant Akolkar, Research Analyst - Auto and Auto Ancillary, Angel Broking, June sales indicated the continuation of "premiumisation" trend in the domestic auto sector. 

"The premium vehicles sales continued to remain in the double digit while entry level vehicle sales softened owing to the run-up to the GST implementation," Akolkar told IANS. 

"The numbers, we believe, indicate that the underlying consumption trend remains fairly strong in the domestic auto sector. With the GST offering further discounts on most models, lower interest rates and strong rural economy, auto sector is likely to continue its growth story."

On Monday, two-wheeler major Hero MotoCorp reported a rise of 14 per cent in its monthly sales for June, which increased to 624,185 units from 549,533 units despatched during the corresponding month of 2016.

"Motorcycle segment volume growth was supported by the wedding season and the very successful in-market activations for Hero's portfolio of trusted brands, including Glamour, Splendor, Passion, HF Deluxe and Achiever," the company said in a statement.

Another major two-wheeler maker, Honda Motorcycle and Scooter India said that its sales last month rose by four per cent to 444,713 units from 427,222 units off-take in June 2016.

Similarly, Suzuki Motorcycle India's sales grew exponentially by 58.6 per cent to 33,573 units in June 2017 as opposed to 21,170 units in June 2016. 

However, two- and three-wheeler maker Bajaj Auto reported a decline of 23 per cent in its total sales, including exports to 244,878 units from 316,969 units sold during the corresponding month of 2016.

Passenger vehicle manufacturer Ford India's combined domestic wholesales and exports in June grew by 5.43 per cent to 20,828 vehicles from 19,754 vehicles sold in the corresponding month last year.

Earlier on July 1, automobile major Maruti Suzuki India had reported a rise of 7.6 per cent to 106,394 units from 98,840 units sold during the corresponding month of 2016.

In contrast, Hyundai Motor India's (HMIL) domestic sales for June 2017 declined by 5.6 per cent to 37,562 units from 39,807 units off-take for the corresponding month of 2016.

The company's January-June sales edged up by 4.1 per cent to 253,428 units from 243,442 units.

"In a challenging market fuelled with speculations on the GST tax structure, Hyundai registered highest ever half year (H1: January-June 2017) domestic sales at 2,53,428 units with a growth of 4.1 per cent on account of strong acceptance of super performer brands Grand i10, Elite i20 and Creta in Pre-GST business environment," Rakesh Srivastava, Director - Sales and Marketing, HMIL, said in a statement.

"We expect a positive demand pull post the successful implementation of GST in the coming months as industry will witness heightened level of customers' interests in a seamless unified single market." 

Leading SUV manufacturer Mahindra and Mahindra (M&M) reported a decline of eight per cent in its overall sales for June.

M&M's total sales for the month under review declined to 35,716 units from 39,009 units sold during June 2016.

Tata Motors' total sales, including exports, during June declined by nine per cent to 40,358 units from 44,525 vehicles sold during the same month last year.

"Mixed consumer sentiments in June 2017 towards the implications of GST have impacted the passenger vehicles business sales, while the commercial vehicles business grew on month-on month basis, due to BS4 production ramp-up," the company said in a statement.

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