Passenger vehicle (PV) sales saw a strong double-digit growth in September as manufacturers pushed more vehicles to the dealers who have depleted their stocks after the lockdown on the back of pent-up demand. Dealers have been stocking since August in anticipation that the upcoming festival season would see good demand for vehicles. According to data released by Society of Indian Automobile Manufacturers (Siam) on Friday, passenger vehicle sales during September stood at 271,027 units, up 26.45% compared with the same month last year. Two-wheeler sales also rose 11.64% during the month on a year-on-year basis. However, commercial vehicle sales continued to do badly, registering a decline of 20.13%. Despite the upswing in sales of PVs and two-wheelers (despatches from factories to dealers) since August, manufacturers are keeping their fingers crossed about sales forecast.
There are two reasons for this. One, the increased sales are on low base and second, volumes in most segments are still below what was seen some five years ago. “Though we are seeing some green shoots, the volumes in most segments are still lower than those seen five years ago. We are expecting strong demand for passenger vehicles and two-wheelers in the festive season. Beyond that it is difficult to predict how demand will shape up. We have to wait and see,” Siam president and MD of Maruti Suzuki India, Kenichi Ayukawa said.
Siam director-general Rajesh Menon said if the numbers in the last five years are compared, it shows industry volumes have gone below the 2016 level. “In terms of volumes, if you look at quarterly and half-yearly comparisons and also to some extent monthly comparison, we have gone below 2016 in most of the segments,” he said. On its part, the auto industry is also careful not to fuel any speculation about a cut in GST rates at this point as it may affect sales during the festival season with consumers postponing their purchase decisions. Though Siam has in the past raised the demand for lowering GST rates on auto products, especially two-wheelers, it is not raising it at this point of time.
When asked about the the demand for GST rate cuts and whether the industry body has been able to convince the government on it, Ayukawa said that the industry’s priority right now is to fight coronavirus and increase production and sales to cater to the festive season demand, while other important matters like reduction in GST rate could be taken up at a later stage. “Right now, nationally and globally everybody is fighting the coronavirus. We will have to collaborate and integrate our effort to fight this pandemic. It is the priority right now,” Ayukawa said.
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