Car sales up in August ahead of cess hike

Passenger vehicle sales rose in August as fears of a price hike following the GST council's decision to hike cess on high-end and large-sized cars pushed up demand from buyers looking to beat deadline for the proposed tax hike.

The demand rush has almost exhausted inventories with dealerships that have stocked up to meet the festival season demand.

Market leader Maruti Suzuki saw a 26 per cent increase in wholesale volumes at 151,270 units in August, compared with 119,906 units sold in the corresponding period last year.

Sales of Maruti Suzuki's compact cars, including Swift, Celerio, Ignis, Baleno, DZire, Tour S, rose 62 per cent to 74,012 units in August, while demand for its utility vehicles like Gypsy, Ertiga, Vistara Brezza, and S Cross increased 28 per cent to 21,442 units

Sales of mid-sized sedan Ciaz rose 4 per cent to 6,457 units last month and sales of small cars like Alto and WagonR remained virtually flat at 35,428 units.

''The monsoons have been good for the second year in a row. We expect the momentum to continue,'' said RS Kalsi, senior executive director (marketing & sales), Maruti Suzuki.

Rival Hyundai Motor India Limited (HMIL) reported a 9 per cent rise in volumes to 47,103 units, helped by demand for the newly launched sedan Verna.

''Hyundai volumes increased on the strong acceptance of the Next Gen Verna, with more than 7,000 bookings within 10 days of launch. Demand was also strong for Grand i10, Elite i20 and Creta amid speculation on the increase in the GST cess,'' Rakesh Srivastava, director (sales & marketing) at HMIL, said.

And, despite the GST blues. Srivastava expects good monsoon rains and a strong product portfolio to help drive festive sales.

Tata Motors, on the other hand, is banking on its new launches Hexa, Tiago and Tigor, which helped increase volumes 10 per cent to 14,340 units last month. The company expects the festival demand to push up sales.

SUV leader Mahindra & Mahindra (M&M) expects to post strong growth, drawing on its diversified product portfolio over the next few months. The company's sales recorded a growth of 6 per cent, selling 19,325 units in August.

Rajan Wadhera, president (automotive sector) is confident that despite ''external challenges'', the company

Toyota Kirloskar Motor (TKM) and Ford India, however registered declines of 6 per cent and 9 per cent to 12,017 units and 7,777 units, respectively, in August.