Car sales skid for the 4th month in a row prior to tax gifts

Car sales in India fell for the fourth consecutive month in August, because car manufacturers regulated shipments to dealers prior to the announcement of the revised goods and service tax (GST) rates.

A total of 321,840 vehicles were sent from factories to dealers to dealers last month, a decrease of 8.8% of 352,921 units a year earlier, showed data issued by Industry Body Society or Indian Automobile Manufacturers (Siam) on Monday. The turnover of tricycles increased by 8.3% of a year earlier to 75,759 units. It was the highest sales ever in the segment for August.

The turnover of two -wheelers grew 7.1% to 1,833,921 units. While the sale of scooters climbed 13% to 683,397 units, Motorcycles reported an increase from 4.3% to 1,106,638 units last month. The sale of mopeds fell by 1.5% to 43,886 units.

“The milestone decision of the Indian government to lower the GST rates on vehicles will go a long way in making broader access to mobility and a new momentum in the Indian automotive sector in the coming party season,” said Rajesh Menon, Director General, Siam.

Under GST 2.0, the tax rates on vehicles for internal combustion engine (ICE) have been reduced from September 22. Small cars will attract 18% tax, compared to 29-31% currently, while larger utility vehicles and luxury cars are confronted with a 40% load compared to 43-50%. The lower taxes and the resulting fall in car prices give car manufacturers the sale of sale to stimulate sales during the crucial festive period. Partho Banerjee, Senior Executive Officer at the largest car manufacturer in the country Maruti Suzuki said that many car manufacturers have restricted dealer -shipments in August prior to the implementation of the revised GST rates.

“But the indications in the market are positive. We saw bookings in Kerala during Onam with 16%. During the Ganesh festival we also saw good investigations and footsteps,” Banerjee said recently in an interview. Nalinian Gollagunta, CEO, Automotive Division, Mahindra & Mahindra, also said that the company is looking forward to the impact of the GST rationalization, “what a question driver would be during the party season.”