Maruti, Mahindra, Honda post double-digit growth in car sales for May

Source : Livemint 2 June 2017

New Delhi: Auto majors Maruti Suzuki India Ltd, Honda Cars India Ltd and Mahindra and Mahindra Ltd posted double digit growth in the domestic sales of their passenger vehicles in May on the back of new models and utility vehicles.

Ford also reported strong growth for the month while, Toyota Motor Corp saw its domestic sales drop during the period.

Market leader Maruti Suzuki said its domestic sales increased by 15.5% during the month to 130,676 units, as against 113,162 units in May 2016. The company’s sales were driven by the entry level cars, compact hatchbacks and utility vehicles (UV). Sales of its mini segment cars, including, Alto and WagonR, increased 18.1% to 39,089 units from 33,105 vehicles in the year-ago month.

The company said sales of the compact segment comprising Swift, Estilo, Dzire, Baleno and Ignis increased 10.1% to 51,234 units in May as against 46,554 units in the same month last year. Besides, sales of utility vehicles, including S- Cross and Vitara Brezza surged by 66.3% to 22,608 units.

Mahindra and Mahindra posted 10.89% increase in domestic sales at 40,602 units last month compared with 36,613 units in May 2016. M&M President Automotive Sector Rajan Wadhera said the projections of a good monsoon and focused investments in rural sector is expected to spur demand.

“We have a robust outlook for future… At Mahindra, we look forward to growth momentum on the back of our existing product portfolio as well as upcoming new products,” he added. Wadhera further said the implementation of goods and services tax (GST) from next month will be a significant game changer, and hoped it would benefit the auto industry.

Honda Cars saw its domestic sales rise 13.3% to 11,278 units in May. “We continue to receive strong demand for New City and Honda WR-V,” said Yoichiro Ueno, president and CEO of Honda Cars India. The government’s plan for timely rollout of GST and a better monsoon forecast will aid in sales growth in the coming months, he added.

Similarly, Ford India reported 16.64% rise in domestic sales at 6,742 units last month as against 5,780 units in May last year. On the other hand, Toyota Motor Corp. saw its sales dip by 13.48% to 10,914 units as against 12,614 units in May last year. Toyota Kirloskar Motor director and senior vice-president (sales and marketing) N. Raja said ambiguity surrounding the proposed GST structure made customers postpone vehicle purchasing plans.

“We expect this impact to magnify in June 2017 until the customers have a clear understanding of the final pricing post the GST rollout,” he added. Raja further said the company expected the government to review the proposed tax structure, under the GST regime, for greener vehicles such as electric, hybrid to achieve cleaner mobility solutions.

“We do hope the government will continue to extend the prevailing tax benefits for greener technologies which are purely based on the fuel efficiency and eco-friendliness,” he added. Under the proposed GST rates, hybrid vehicles are to be taxed at 28% with 15% cess, same as that of other large luxury cars and SUVs.

Under the GST, the tax incidence on hybrid vehicles will go up to 43% from the current level of effective tax rate of 30.3%. In the two-wheeler segment, country’s largest two-wheeler maker Hero MotoCorp Ltd reported 8.7% increase in sales at 6,33,884 units in May.

Niche bike maker Royal Enfield (Eicher Motor Co. Ltd) reported a 24.87% jump in total sales at 60,696 units in May. It had sold 48,604 units in May 2016. India Yamaha Motor Pvt. Ltd reported 10.65% increase in sales at 69,429 units in May. Yamaha’s senior vice-president (sales and marketing) Roy Kurian said the company has been able to serve customers’ needs of efficient technology and superior design.

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