Carmakers post robust sales in August, consumers buy big before new GST cess kicks in  

From the looks of it, overall passenger vehicle (PV) sales for last month are going to be of the august type. If in July 2017, the domestic PV industry came close to crossing the 300,000 unit mark (298,997 / +15.12%), then overall sales in August 2017 could near that mark or even surpass it. That’s because customers are plonking down their money on their favourite models, benefiting from handsome GST-driven price cuts before the new, additional GST cess kicks in.

As is known, the Union Cabinet has approved the government-appointed GST Council's ordinance proposal to raise the ceiling for the cess applicable (15 percent) over and above the GST slab (28 percent) on luxury cars and SUVs and PV industry leaders have voiced their disappointment, citing an adverse impact on vehicle sales.

Maruti Suzuki India, which posted its highest-ever monthly sales in July 2017 (153,298 units / +21.9%), has clocked another month of robust sales. In August 2017, the carmaker sold a total of 151,270 units (+26.2%), showing that there’s little the competition can do to impact the company’s stranglehold on the domestic market.

Other than flat sales for the entry-level hatchback duo of the Alto and Wagon R, which sold 35,428 units, down 0.2% (August 2016: 35,490), overall numbers for other segments are all up. Demand for the five compact cars (Swift, Celerio, Ignis, Baleno and Dzire) soared 62.4% to 74,012 units (August 2016: 45,579), which is indicative of strong demand for the premium Baleno hatchback and the new Dzire sedan. It may be recollected that the Baleno, the largest of the company’s hatchbacks which comes with ABS and dual airbags as standard across the 11-variant range, sold a total of 19,153 units in July 2017, its best-ever monthly total since launch in October 2015. 

Meanwhile, monthly sales of the Ciaz premium sedan seem to be settling down in the 6,000 unit range. The car sold a total of 6,457 units last month, up 3.9% (August 2016: 6,214), which is a pointer to the fact that the car’s sales shift to the premium Nexa retail channel is working. The Ciaz posted its best-ever monthly sales in April 2017 (7,024).

Overall passenger car sales at 115,897 units were a 28.4% growth over year-ago numbers (August 2016: 90,629).

The utility vehicles – Gypsy, Ertiga, Vitara Brezza and S-Cross – as usual provided firepower for monthly sales: at 21,442 units sold and 27.6% YoY growth (August 2016: 16,806). Expect the Maruti Vitara Brezza, which notched its best-ever monthly sales of 15,243 units in July 2017, to have contributed the bulk of the UV numbers.

Bringing up the rear are the two vans, the Omni and the Eeco which together sold 13,931 units, up 8.6% (August 2016: 12,831).

Meanwhile, Hyundai Motor India, the No. 2 PV player in the country, has reported domestic market sales of 47,103 units in August 2017, registering a growth of 9% (August 2016: 43,201) and its best monthly sales yet in this calendar year. Commenting on the August sales numbers, Rakesh Srivastava, director - Sales and Marketing, said, “Hyundai volumes at 47,103 units grew by 9% on the strong acceptance of the next-gen Verna with more than 7,000 bookings within 10 days of launch along with strong demand for the Grand i10, Elite i20 and Creta in a market fuelled with speculations on the GST cess increase and challenges posed by floods in many states.”

Mahindra & Mahindra sold a total of 19,325 units in August 2017, which marks 6% YoY growth (August 2016: 18,246). This comprised 18,255 UVs (+7%) and 1,070 cars and vans (-5%). Commenting on the performance, Rajan Wadhera, president, Automotive Sector, M&M, said: “We are happy with our performance in August. Our passenger vehicles grew by 6% and our overall sales grew by 4%. Our brands continue to gain traction despite several external challenges. As we get into festive season, we are confident of a good growth over the next couple of months.”

Honda Cars India seems to be on a dream run. The carmaker sold 17,365 units in August 2017, up 25 percent (August 2016: 13,941). The company has been maintaining strong sales momentum in the current fiscal year and has sold 73,012 units during April-August 2017 with a cumulative growth of over 22% (April-August 2016: 59,821).

In August, the City sedan wrested back its numero uno position from the WR-V, which had beaten it in July. The City sold 5,538 units, followed by the WR-V (5,200), Jazz (2,747), Amaze (1,928), BR-V (1,247), Brio (640), CR-V (55) and the Accord Hybrid (10).

Yoichiro Ueno, president and CEO, Honda Cars India, said, “Honda Cars India continues to record strong sales in August led by the City and WR-V. Festive purchases have already begun in some parts of the country and we expect the festival season to further boost our sales numbers in the next two months.”

Tata Motors registered total sales of 14,340 passenger vehicles, comprising 11,462 cars and 2,878 UVs. This marks a 10.29% YoY growth (August 2016: 13,002). While strong demand for the Tiago hatchback and Tigor compact sedan bolstered passenger car sales, the Hexa crossover for the UV sales accelerator.  

Toyota Kirloskar Motor, which had posted handsome sales in July, did not manage the same in August with sales of 12,017 units, down 6% (August 2016: 12,801). The company says it witnessed a 40-50% jump in customer orders last month following the announcement about the potential GST cess hike. While enquiries continue to be significantly high, due to production constraints the company has not been able to cater to the enhanced demand.

Commenting on the monthly sales, N Raja, director and senior VP, Sales & Marketing, Toyota Kirloskar Motor said, “Our sales numbers this month are not truly reflective of the existing customer orders. After the announcement on potential cess hike, there was a considerable rise in customer enquiries and orders.  Yet we had production limitations which held us back from catching up with the high demand. Due to holidays in August, we further had the constraint of lesser number of production days. With the demand on the rise, the current waiting period for Innova has gone up to around 6-8 weeks and the Fortuner to around 10-12 weeks respectively. We are trying our best to bring down the waiting period and meet their needs at the earliest possible."