A pedestrian stands at a roadside as traffic passes in Mumbai (Photographer: Dhiraj Singh/Bloomberg)

Automakers Shake Off GST Disruption In August

Festive cheer came in early for Indian automakers as sales recovered in August after uncertainties about the Goods and Services Tax cleared at the dealer level.

India's largest carmaker Maruti Suzuki India Ltd. saw a 23-percent sales growth driven by higher demand for its compact cars, including the Ignis, the Baleno and the Celerio. The country’s second-largest carmaker Hyundai registered a growth of 9 percent.

Nomura had expected passenger vehicles to grow on the back of an inventory build-up for the festive season, starting with Ganpati in the west zone and Onam in the south. Recovery began in July after sales slowed down or declined in June as dealers reduced inventory ahead of GST fearing losses on existing stock. Volumes continued to improve in August.

Commercial vehicle sales, which have been subdued in the recent past due to a transition to stricter emission standards and the nationwide tax regime, also showed a strong growth. This was a surprise as Nomura expected a modest growth due to no improvement in freight traffic after GST.

August was a mixed bag for two-wheeler manufacturers, with a flat to strong growth in sales. A healthy sowing season and a good monsoon was expected to drive rural demand for two-wheelers ahead of the festive season.

Automakers Shake Off GST Disruption In August

Passenger Vehicles

Demand for Maruti Suzuki’s smaller cars like the Alto and the WagonR fell marginally. Sales of compacts including the Swift, the Baleno and the Ignis models rose 62 percent. Volumes of utility vehicles, including the Vitara Brezza, rose at 27.6 percent.

Mahindra & Mahindra's passenger vehicle segment grew 6 percent over last year, largely helped by utility vehicles. M&M's car and van sales fell 5 percent.

Tata Motors too sold 10 percent more passenger vehicles than August last year, bolstered by a strong demand for utility vehicles which grew by 84 percent. Car sales remained flat.

Automakers Shake Off GST Disruption In August

Commercial Vehicles

The country’s largest truckmaker Tata Motors registered a growth of 52 percent in August. It attributed the rise to the increased acceptance of its catalytic reduction technology, which it claims offers better fuel efficiency. Passenger carrier sales, however, fell 4 percent as state transport units delayed procurement.

Ashok Leyland's sales jumped 25 percent in August. Sales of light commercial vehicles went up by 14 percent, while medium and heavy commercial vehicles grew 29 percent.

For Mahindra & Mahindra, higher sales of medium and heavy commercial vehicles offset the decline in sales of light commercial vehicles. MHCVs registered an increase of 45 percent, while LCV numbers fell 27 percent in August.

Bajaj Auto’s sales recovered after six months due to a surprise jump in commercial vehicle volumes. The automaker, known primarily as a manufacturer of two-wheelers, saw a 13-percent rise in commercial vehicle sales.

Automakers Shake Off GST Disruption In August


The demand for tractors rose on the back of strong rural demand, government spending and a good monsoon.

M&M's farm equipment segment sold more than 16,000 units in August, an increase of 22 percent compared to the same month last year. Another tractor maker Escorts’ overall sales stood at 4,587 units, clocking a growth of 23.2 percent.

Escorts reported more than two-fold export growth after shipping out 189 units.

Automakers Shake Off GST Disruption In August


India’s biggest two-wheeler maker Hero Motocorp saw sales grow 10 percent over last year in August. It sold 6.78 lakh units which is its highest ever monthly sales. Record sales were on account of the "early arrival of the festival season", it said.

Eicher Motors posted a 22-percent sales jump after selling 67,977 units, driven by a robust demand for its Royal Enfield motorcycles with capacity up to 350 cc.

Two-wheeler sales for Bajaj Auto increased 1 percent over last year, buoyed by exports. Domestic sales fell 2 percent.

TVS Motor Company saw sales its rise 16 percent, led by a high demand for scooters, which registered a 49.3 percent growth.

Automakers Shake Off GST Disruption In August


In the four-wheeler segment, Anand Mahindra-led M&M exported 2,582 units, which was 29 percent higher compared to the corresponding month last year. Maruti Suzuki reported a 4.7 percent decline year on year.

In the two-wheeler segment, Bajaj Auto Ltd.’s exports rose 7 percent, while the increase was 12 percent for Tata Motors.