June 2017, a tough month for car manufacturers

With the impending onset of GST and the uncertainties prevailing around the taxation and its implications, June 2017 seems to have been a mixed month for the auto manufacturers. While some luxury car brands seemed to have cash in on GST and availed good schemes to attract customers, other manufacturers preferred to wait and watch.

Honda Cars India Ltd. (HCIL), leading manufacturer of passenger cars in India, registered monthly domestic sales of 12,804 units in June 2017 against 11,407 units in corresponding month last year, registering a growth of 12.2%. The company’s best seller Honda City recorded cumulative sales of 34,125 units during Jan – June 2017 becoming the highest selling mid-size sedan during H1 of 2017.

Meanwhile, Ford India seems to have taken a bit of a hit from GST. While, Ford India’s combined domestic wholesales and exports in June reached 20,828 vehicles from 19,754 vehicles in the corresponding month last year, June domestic wholesales came down to 6,149 vehicles, as against 9,469 units, while exports grew to 14,679 vehicles compared to 10,285 units in June of last year.

In June 2017, the home bred Tata Motors’ passenger vehicles sales were impacted by the mixed reactions towards GST resulting in low buying sentiments. The passenger vehicle business recorded sales of 11,176 nos., lower by 10%, over 12,482 nos. in June 2016. This drop in volume is seen temporary and will be recovered in the quarter to come based on 11% growth in April-June 2017 quarter compared to the last year.  

The other Indian auto manufacturer, Mahindra and Mahindra too posted a de-growth in June 2017 when compared to the same month last year. Mahindra’s Passenger Vehicles segment (which includes UVs, Cars and Vans) sold 16,170 vehicles in June 2017 as against 17,070 vehicles during June 2016.

Meanwhile, Hyundai Motor India Ltd (HMIL), the country’s second largest car manufacturer and the largest passenger car exporter registered the domestic sales of 37,562 units for the month of June 2017. This marks a de-growth of 5.6% when compared to 39,807 units sold in June 2016.

Commenting on the June sales Mr. Rakesh Srivastava, Director – Sales and Marketing, HMIL said, “In a challenging market fueled with speculations on the GST tax structure; Hyundai registered highest ever half year (H1: Jan –June 2017) domestic sales at 2,53,428 units with a growth of 4.1% on account of strong acceptance of super performer brands Grand i10, Elite i20 and Creta in Pre-GST business environment.  We expect a positive demand pull post the successful implementation of GST in the coming months as industry will witness heightened level of customers’ interest in a seamless unified single market.”

Coming to India’s largest car manufacturer, Maruti Suzuki seems to have been the only company to have registered a growth. While Maruti Suzuki’s June 2016 domestic sales stood at 92133 units, it had registered domestic sales of 93263 units for June 2017, thus showing a minuscule 1.2% growth.