Vehicle Sales In September To Remain Flat Despite Higher Footfalls, Says SIAM President
Rajan Wadhera expects vehicle sales in September to either remain flat or contract 5 percent over the year-ago period.
WATCH | BloombergQuint’s Interaction With SIAM’s Rajan Wadhera Here:
India’s automakers have started to witness an increase in footfalls in showrooms as hopes of a cut in goods and services tax rate faded after the last meeting of the council, according to Rajan Wadhera, president at Society of Indian Automobile Manufacturers.
“For the first 15-20 days everybody was expecting some sort of GST cut, so they postponed purchases and even enquiries. But after the Sept. 20 meeting of the (GST) council, it’s clear that there is no rate cut,” Wadhera, who’s also the president (automotive sector) at Mahindra & Mahindra Ltd., told BloombergQuint in an interview. That led to conversion of a sizable chunk of these enquires into actual sales in the north India ahead of “Navratri”.
Yet, he expects sales in September to either remain flat or contract 5 percent over the year-ago period.
A BloombergQuint survey of 10 dealerships, however, showed that retail sales of vehicles rose marginally in September over the previous month as automakers offered the year’s biggest discounts ahead of the festive season.
But Wadhera said the automotive industry is not just about the utility and passenger vehicles, but also commercial vehicles which are not driven by festive season but rather by business sentiments. “They are driven by consumption and GPD growth. To that extent, we are not very hopeful yet of the commercial vehicle segment picking up. That’s a cause of worry.”
Sales of India’s automakers have been declining over the last one year, leading to a worst slowdown in more than a decade. Besides vehicle sales, falling consumer goods volume is another indicator flashing red, reflecting a broader slowdown. The government, however, has announced several measures such as corporate tax rate cut, rollback of tax surcharge on foreign investors, clarity on vehicles to be sold before stricter emission standards kick in and a new scrappage policy, among others, to revive the economy after growth fell to its lowest in six years.
