Auto sales witness worst-ever fall in August

Vehicle sales across categories, including passenger vehicles (PVs) and two-wheelers and commercial vehicles (CVs) stood at 18,21,490 units last month, as against 23,82,436 units in August 2018, a fall of 23.55 per cent.

Automobile sales witnessed its worst-ever drop in August across categories, with passenger car sales falling by as much as 41.09 per cent, according to data released by industry body SIAM on Monday. This is the steepest fall in overall vehicle sales in the country since the Society of Indian Automobile Manufacturers (SIAM) started recording wholesale vehicle sales data in 1997-98.

Vehicle sales across categories, including passenger vehicles (PVs) and two-wheelers and commercial vehicles (CVs) stood at 18,21,490 units last month, as against 23,82,436 units in August 2018, a fall of 23.55 per cent.

In July, overall auto sales had witnessed its sharpest decline in nearly 19 years, dropping 18.71 per cent to 18,25,148 units last month as against 22,45,223 units in July 2018.

In case of PVs, this was the tenth consecutive month of decline in automobile sales.

The PV category — which includes passenger cars, utility vehicles and vans —recorded its worst-ever fall in August, slumping by 31.57 per cent to 1,96,524 units from 2,87,198 units in the year-ago period.

Previously, the worst decline in this segment was registered in July this year when sales had fallen 30.98 per cent to 2,00,790 units.

In the PV segment, market leader Maruti Suzuki India posted a 36.14 per cent fall in its August sales at 93,173 units. Within PV category, domestic car sales were down the highest by 41.09 per cent at 1,15,957 units as against 1,96,847 units in August 2018.

Industry expecting govt measures to tide over crisis

Automobile sector continued to report sharp drop in sales of all categories of vehicles in the month of August, putting pressure on the government to examine the industry’s demand for tax reduction for the sector that is the largest contributor to the manufacturing output in the country. Even as the GST Council is expected to discuss the demand for tax cut on cars, amid opposition by many states fearing revenue loss, the demand revival in the sector may not happen until the broader economy starts to grow faster than the 25-quarter low of 5 per cent recorded in April-June.

Two-wheeler sales declined by a record 22.24 per cent to 15,14,196 units in August 2019, compared to 19,47,304 units in August 2018. Commercial vehicle sales were down 38.71 per cent to 51,897 units in August as compared with 84,668 units in August 2018. Similarly, motorcycle sales last month declined 22.33 per cent to 9,37,486 units as against 12,07,005 units a year earlier. Scooter sales declined by 22.19 per cent to 5,20,898 units as compared with 6,69,416 units in August last year.

During the April-August period, PV sales fell 23.54 per cent, two wheeler sales dipped 14.85 per cent and three wheelers sales fell 7.32 per cent, SIAM data showed. With prolonged slump in sales, automobile and component manufacturers have been seeking Goods and Services Tax (GST) cut on automobiles to 18 per cent from 28 per cent to help the sector improve sales.

The Centre is expected to move the proposal for reduction in rate at the GST Council meeting to be held on September 20 in Goa. With the government facing concerns on raising tax resources, it is difficult that the GST Council will accede to any reduction in GST rate on automobile sector. While tax cut may improve sentiment, it is not immediately clear whether it will result in demand revival.

Minister of State for Finance Anurag Thakur last Friday asked automobile sector players to take up their demand for reduction in GST rate on cars with state finance ministers as well, who are part of the GST Council that takes a decision on such rate reductions.

“You are aware that any rate cut on GST needs to be approved first by the fitment committee, then by the GST Council. I request all of you to also reach out to the state finance ministers who are part of the GST Council,” he said.

For the past 10 straight months now, almost all manufacturers of passenger vehicles and two-wheelers have been resorting to production cuts and plant closure for many days.

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