Car Sales Remain Robust In May - Clocks 11% Growth

Demand for new cars remained robust for the second month in a row last month with the passenger vehicle industry registering a growth of 11 percent during May.

Led by Maruti Suzuki, India’s largest car maker, five of the top six car makers which make up at least two-thirds of the local market sold 1.79 lakh units last month. The on-going marriage season, fear of rise in prices post implementation of GST and cheaper vehicle loans have pushed demand for new vehicles.

Models like the Baleno, Ignis, Alto and Swift drove Maruti Suzuki sales during May recording a total 130,248 units as against 113,162 units clocked in the same month last year.

Volumes of the utility vehicle segment which is made up of Ertiga and Brezza, rose impressively recording a growth of 66 percent during the month. UVs now account for 17 percent of Maruti’s total domestic sales.

Sales of utility vehicle major Mahindra & Mahindra (M&M) rose by 3 percent to 20,290 units during the reporting month as against 19,635 units sold in same month last year.

Rajan Wadhera, President, Automotive Sector, M&M said, “Given the favourable monsoon projections and the focused investment in the rural sector, we have a robust outlook for the future which is expected to spur demand. The implementation of GST will be a significant game-changer and we hope it benefits the auto industry."

Ford sales grew by 17 percent to 6,742 units as compared to 5,780 units while that of Honda grew by 13 percent to 11,278 units as against 9954 units.

Yoichiro Ueno, President and CEO, Honda Cars India, said “We are happy to have achieved positive growth in May sales. We continue to receive strong demand for new City and the WR-V. The government’s plan for timely rollout of GST and a better monsoon forecast will aid in sales growth in coming months.”

Toyota was the outlier during last month reporting a fall in volumes possibly because of the anticipation in reduction in prices post the roll-out of GST. Price of the best-seller Innova Crysta as well as the Fortuner are expected to come down while that of the Camry and Prius hybrid will rise.

Raja, Director & Senior Vice President, Sales & Marketing, Toyota Kirloskar Motor said, “With the ambiguity surrounding the upcoming GST proposed tax structure, the customers are postponing their plan of purchasing the vehicle post the GST implementation. We expect this impact to magnify in June 2017 until the customers have a clear understanding of the final pricing post the GST roll-out.”