Four Wheelers Sales June 2017: Sales drop by up to 85% as GST gives buyers cold feet

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Added in: Ford

Owing to the anticipation of significant price drops post the implementation of GST, most customers withheld from purchasing new vehicles. Despite their doling out heavy discounts across their model range, manufacturers reported slower sales in the month of June 2017.

The country’s car manufacturer, Maruti Suzuki was the only one that showed a marginal increase of just over 7% as compared to June 2016. All other manufacturers have shown a significant negative movement on both the year-on-year and month-on-month scales.

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Even Maruti, with its overall sales of 1,06,394 units is a fair step below the May figures which hovered around the 1.30 Lakh mark. Riding high on the success of the Vitara Brezza, Maruti posted a 43 per cent increase in its UV sales with respect to 2016 which helped it maintain a healthy overall rating.

Hyundai clocked 37,562 units in June 2017, a slump of 3 per cent as compared to the 38,706 units sold in the same period last year and a 10% drop from its May figures.

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The company, however, took respite in the fact that it had managed to post its best half-yearly growth yet in the first half of 2017. Director – Sales and Marketing, HMIL Mr. Rakesh Srivastava said, “In a challenging market fueled with speculations on the GST tax structure, Hyundai registered its highest ever half year domestic sales at 2,53,428 units with a growth of 4.1percent on account of strong acceptance of super performer brands Grand i10, Elite i20 and Creta in pre-GST business environment.”

GST Impact: Maruti announces price-cuts of up to 3 per cent for select models

Ford too published a loss of about 35% in terms of year-on-year sales with just 6,149 cars rolling out from the dealer’s floors in June.

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Mahindra posted a drop of over 8 per cent in overall sales and about 3% in domestic sales. While passenger vehicles sales slumped by 5%, the commercial vehicles segment grew by over 12% to provide some respite to the company.

Indigenous auto-maker, Tata also saw a negative growth of around 9% on a year-on-year basis with just 40,358 units shifted in June 2017.

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In its press release Tata said, “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.”

GST Impact: Toyota Kirloskar Motor Revises Product Prices; Passes Benefits Of GST To Customers

The biggest impact, however, was felt at Toyota which showed a massive drop of over 85% with just 1,973 cars sold in the domestic market.

 

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Mr. N. Raja, Director – Sales & Marketing at Toyota Kirloskar Motors said, “The uncertainty surrounding the GST implementation with regard to the passenger vehicles has impacted the retails as the customers are postponing their plan of purchasing the vehicle post GST roll out.” He maintained that it was a conscious decision to release less number of vehicles to the dealers in anticipation of the change.

With most companies announcing revised lower prices post GST, manufacturers are bullish on the sales prospects for July and are confident of making up lost ground. Toyota said, “We are optimistic that the GST implementation will be fruitful for the growth of the Indian auto industry. With the change in prices we hope to see positive sentiments amongst the consumers in the month of July. We think the industry will break into double digit territory this year.”

 

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Mr. Rakesh from Hyundai also echoed similar sentiments. “We expect a positive demand pull post the successful implementation of GST in the coming months as industry will witness heightened level of customers’ interest in a seamless unified single market.”

Company June’17 June’16 %Change
Maruti Suzuki India 93,263 92,133 1.23
Hyundai Motors India 37,562 38,706 -3.04
Ford India 6,149 9,469 -35.06
Mahindra & Mahindra 16,170 17,070 -5.27
Tata Motors 11,176 12,509 -10.66
Toyota Kirloskar Motors 1,973 13,502 -85.39

 

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