GST Spurs the Indian Automobile Market—Sale of Maruti and Honda Surge

Posted on: Aug-2017 | By: 9 Dimen | Automotive

Indian automobile market faced loads of uncertainties in the previous months as it was relatively a mixed bag for domestic car segment with Ford, Maruti Suzuki, and Honda reporting its double digit growth, while on the other hand, Toyota witnessed a decline in its sale.

These conditions were caused owing to postponed of booking by customers with a hope that GST might make some impact on the prices of the vehicles. Carmakers anticipated that the new indirect administration and monsoon forecast would assist the sales of the incoming period.

The leading market player Maruti Suzuki reported 15% growth, which makes up to 1.30 Lakh units compared to the last year. The majority of the sale was generated by utility vehicles, which jumped up by 66%.

Hyundai Motors also said that it managed to sell 42,007 vehicles till May 2017 with an increase growth of 1.6%, at the same time; Honda Cars also reported 13% growth in the sale, which sums up to 11,278 units.

The uncertainty developed due to GST structure motivated the customers to postpone the purchase plans. Thus, projecting on the potential customers after gaining transparency in terms of final pricing post GST implementation from June 2017, it is expected that the demand ratio might surge.

Mahindra and Mahindra domestic passenger vehicle segment managed to sell 20,290 units which took the sale up by 3%; on the other hand, the commercial vehicle sale rose by 24% owing to the sale of 16,225 units. Mahindra also claimed that considering the monsoon projections and high investment in rural sector, it seems that we have a strong futuristic outlook in terms of demand, which is expected to spur the sale.

Focusing on the two-wheeler segment in Indian market, Hero MotoCorp reported 8.7% lift and total sales was 6, 33,884 units. Other players including Royal Enfield saw a growth of 24.87% to 60,696 units. TVS Motor two-wheeler sales grew by 16.3%, which makes to 2.06 Lakh units and Yamaha Motor managed to sell 69,429 units with an increased sale of 11%.

Looking at the rising sales figures of the market players, the disclosed GST slabs for automobile sector have created beneficial awareness among the consumers, which has significantly boosted the number of booking for the vehicles.