Passenger vehicle sales decline 11% in June

Domestic automobile sales saw a muted growth of one per cent in June as the passenger vehicle (cars, utility vehicles and vans) segment declined more than 11 per cent. A four per cent growth in two-wheelers, however, helped the industry remain in the green. Sales of commercial vehicles grew by just 1.44 per cent, while three-wheelers declined almost 25 per cent. Data from Society of Indian Automobile Manufacturers (Siam), which captures wholesales of companies to dealers, shows the passenger vehicle makers dispatched 198,399 units in June, about 11 per cent lower to the volumes in corresponding month last year. This was the first decline in six months. But June happens to be an exceptional month as the industry prepared for the roll-out of the goods and services tax (GST) from July 1st. Wholesales declined last month as dealers were not making fresh purchases. The government had clarified it would give 100 per cent input tax credit on excise duty and not on cesses, which together amount to 5-6 per cent of the cost of a vehicle. Dealers accordingly focused on selling existing stocks with them to prevent losses, said Vishnu Mathur, director-general, SIAM.