CHENNAI: Automobile sales continued to record year-on-year double digit growth, registering 13.76 per cent for the month of August, despite a marginal slowdown in some segments due to the uncertainty regarding GST cess rates.
According to the Society of Indian Automobile Manufacturers (SIAM), domestic passenger vehicle sales grew 13.76 per cent in August, driven by consumers trying to make the most out of the price cuts post GST. According to the data, passenger vehicle sales were at 2,94,335 units in August compared to 2,58,737 units in the same month last year.
Utility vehicles continued to record high-pace growth, remaining one of the main drivers of overall growth, clocking the second highest monthly sales for the ongoing fiscal at 78,664 units, up by 19.62 per cent. The biggest sales month for this financial year was in July, when the segment grew 35.5 per cent.
SIAM director-general Vishnu Mathur said that while the overall market is “coming back”, it is yet to be seen whether the recovery is “sustainable or not”. Mathur added the reason was pent-up demand from the months preceding GST rollout and customers advancing purchases because they felt that a cess hike was imminent. On Saturday, the GST Council approved increasing cess on mid-sized cars by 2 per cent, large cars by 5 per cent and SUVs by 7 per cent, with the new rates coming into effect on Monday.
Meanwhile, total two-wheeler sales in August grew 14.69 per cent, reflecting a return to normalcy in rural markets after back-to-back disruptions in the form of demonetisation and GST.Analysts are largely positive, with Abdul Majeed, Partner, Price Waterhouse, stating that with the GST Council taking the middle path in cess hikes, growth looks positive for the automotive industry this year.