After months of decline in sales, a few carmakers in the country, including the biggest player Maruti Suzuki, have clocked a double digit growth in June, thanks to the excise duty benefits announced by the UPA government and recently extended by the NDA government.
Domestic sales of the biggest carmaker, Maruti Suzuki, reported the biggest year-on-year growth of 31.1% in June this year, and crossed the 100,000 mark. The company sold 1,00,964 units in June compared to 77,002 units in June last year.
Honda Cars India and Nissan Motor India have both reported a double digit growth. Hyundai too saw its domestic sales grow 9.5% during the month on a year-on-year basis.
Tata Motors, Mahindra and Mahindra (M&M) and General Motors, however, continued to show negative growth.
According to the total sales numbers reported by nine carmakers on Tuesday, the overall wholesale dispatches increased by almost 18% during the month, as compared to the same month last year. This is the second increase in a row, after companies reported a growth of 3.08% in May.
Car sales grew marginally in February by 1.39%. But it continued the negative trend in March and April as wholesale dispatches degrew by 5.08% and 10.15% respectively. Barring the marginal growth in February, car sales have continued to decline since September last year.
Analysts feel that one of the key reasons for a double digit growth in June could be people advancing their buying plans. The excise duty cut announced by the previous government was due for expiry on June 30, post which certain automakers were planning to go for a price hike. But last week, the finance minitser extended the cut till December.
Since the excise cut was to expire by June 30, many people went on a buying spree anticipating a price hike, Ajay Sethiya, analyst with Centrum Broking, said. "Hence the higher number of wholesale dispatches. We could see some correction in July."
But companies expect the momentum to continue owing to extension of excise benefits. Maruti Suzuki, for example, is hoping to achieve double digit growth this year.
New launches from companies like Honda Cars India, Toyota Kirloskar Motor (TKM) and Nissan Motor India helped post a growth of 75%, 9.1% and 47.9% respectively.
Rakesh Srivastava, senior vice president, sales and marketing, Hyundai Motor India, said in a statement: "Hyundai with a volume of 33,514 units has grown by 9.5% over the past year on the phenomenal success of Xcent, Grand and Santa Fe. With the extension of excise duty benefit, we hope to maintain the growth in volume while strengthening our product portfolio and improving channel efficiencies."
N Raja, director and senior vice-president, sales and marketing, TKM, said in a statement: "We sold 922 units and 626 units of the Corolla Altis and Etios Cross. We received more than 5,400 booking orders for Etios Cross and more than 3,000 for Corolla Altis. The waiting period for Etios Cross is more than three months and it is more than two months for Corolla Altis. We are currently working towards reducing the waiting period."
On the other hand, domestic passenger vehicle volumes of Tata Motors, M&M and General Motors declined 33%, 2.6% and 21.3% respectively because there were no new launches.