Auto sales in August see marginal growth of 0.02 per cent
August sales have been below par, but automobile dealers remain hopeful for the growth curve to arrive with GST 2.0 and the approaching festive season as well.
New Delhi: India’s auto retail sector had a flat month-on-month (M-o-M) growth at 0.02 per cent in August, recording a minute year-on-year growth at 2.84 per cent, according to the data released by the Federation of Automobile Dealers (FADA). The two-wheeler segment also showed a 1.34 per cent M-o-M growth with a 2.18 per cent increase Y-o-Y, made possible by festive enquiries during Ganesh Chaturthi and Onam.
Still, heavy rainfall and uncertainty about the new GST framework weighed on actual sales, with potential buyers delaying their purchases due to the expectation of possible price cuts. Since the announcement of a GST cut during Prime Minister Narendra Modi’s Independence Day speech, there has been a dip in the buying curve.
Passenger vehicle sees 1.63 per cent dip
Passenger vehicle sales fell 1.63 per cent M-o-M, with inventories piling for nearly 56 days. Even though the bookings remained fine, the weather-related supply disruptions and wait-and-watch approach before the GST 2.0 affected the retail momentum.
The industry body FADA indicated that heavy rains and floods in quite a few regions affected walk-ins, while uneven supply of models that are in high demand and aggressive original equipment manufacturers also added to the pressure. FADA noted that demand fundamentals were still intact, made stronger with festive sentiment and strong customer interest for both ICE and EV models.
Commercial vehicle sales contract by 1.11 per cent
On the other hand, commercial vehicles contracted by 1.11 per cent M-o-M while delivering a good 8.55 per cent increase on Y-o-Y due to the e-commerce activity and replacement demand. Still, the sentiments did soften towards the end of the month due to GST-related anticipation.
Tractors had an out-of-the-ordinary growth due to the heavy monsoon, rural liquidity and crop outlook. Three-wheelers had the biggest decline with a M-o-M fall of 7.47 per cent.
In the light of GST 2.0 reforms, FADA president CS Vigneshwar has said that the announcement has reinforced the buyer optimism with lots of families looking to make their purchase as the reduced GST rates arrive. He felt that the policy hadn’t actually made the demand fall, but pushed it back to September.
Vigneshwar felt that there was going to be big growth in the upcoming festive season, made possible by India’s auto retail industry’s resilience as well as the GST reform. He concluded that the dealers were fairly confident that September would show a big growth coming at the back of policy reforms and festive demands.