Before GST implementation, the car market slowed down because people were waiting for car prices to go down. Passenger vehicles have recorded 37.5% growth in June 2018 and amazingly it is the first time in last eight years that the market has touched such a record. However, this growth can also be due to buyers who postponed to buy the cars after GST implementation.
Few people from the industry say that in upcoming months, the car growth will be normal as base impact ends. In recent months, the passenger vehicles have touched a growth of 18-20%. Industry experts also mentioned that increasing petrol-diesel prices, increasing prices of raw material and decreasing rupees value could increase the car prices and it could impact the short term demand adversely.
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In June month, the automakers have sent 2,73,759 utility vehicles, vans and cars to dealerships, as informed by the Society of Indian Automobile Manufacturers (SIAM) on Tuesday. The last record of such a high growth was observed in October 2010. Sugato Sen, Deputy Director General, SIAM said that before GST implementation people were waiting for GST implementation and consumers had stopped purchasing new vehicles. They wanted to purchase a vehicle at lower prices after GST roll out. Consequently, this has resulted in lower growth in May- June 2017. He further said that few companies stopped dispatching new vehicles as seeking lower demand.
Other automotive segments also observed with high growth during this month. Two-wheelers to heavy trucks, the sale of all sort of vehicles have increased by 25% and approximately 22.8 lakh units were sold out. Commercial vehicles segment has caught with growth volume by 41.7% to 80,624 units in the segment. Three-wheelers has increased by 56% in domestic market and sold out 56,884 units. On the other hand, two-wheelers have caught with 23% growth and touched 18,67,884 units. Sen mentioned that BS-VI emission standard affected commercial and two-wheelers positively last year.
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He said that the growth in the segment will continue growing. In the upcoming months, the government’s investment in infrastructure and increase in MSP in rural areas will increase the purchasing power. In June, the export has touched 32.6% growth and recorded 3,94,983 units for sale.
