CHENNAI: Dealers’ scramble to restock depleted inventories post the implementation of the Goods and Services Tax (GST) has pushed up passenger vehicle sales growth for the month of July to over 15 per cent.
According to data released by the Society of Indian Automobile Manufacturers (SIAM), passenger vehicle sales rose by 15.12 per cent to 2,98,997 units in July from 2,59,720 units in the same month last year.
Both dealers and manufacturers say that one of the primary drivers for the increase, apart from the GST induced cut in prices, was the eagerness of dealers to restock on inventory that they had allowed to decrease during the run-up to July 1. Dealers liquidated stock to be better able to benefit from the cut in tax after GST and to lose out on tax paid on old stock.
“In June, dealers were liquidating their stocks, while the reverse has happened in July. Dealers have replenished their stocks across segments last month,” SIAM director general Vishnu Mathur said.
He added that it will be clear by next month as to how retail sales have fared. However, according to Mathur, the second half is expected to be better in terms of sales on the back of good monsoons and rural sales also expected to pick up.
During July, however, car sales were up 8.52 per cent at 1,92,773 units as against 1,77,639 units last year. Utility vehicles sales continued on the high growth curve, rising by 35.72 per cent to 86,874 units.
For the period between April and July, passenger vehicles grew by 7.9 per cent compared to the same period of previous year. Commercial vehicles sales were, however, down 3.67 per cent during the period. SIAM has given a outlook of seven to nine per cent growth in the passenger vehicles segment for the current fiscal year.