GST Impact: Alto, Dzire, among top car models that saw fall in June sales

An employee writes on a register inside the Tata Motors car showroom in Ahmedabad, India, November 6, 2015. REUTERS/Amit Dave/File Photo - RTX2HWSR

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The midnight switch to the Goods and Services Tax (GST) sucked out a lot of momentum from demand for passenger cars, with only a handful of models reporting growth last month.

Five of the ten best-selling cars reported a fall, while the remaining five reported a healthy double digit jump in sales. These top ten models make up 55 percent of India’s domestic sales. On a regular basis, only 1-2 models are in the negative, in a month, from the top ten list.

In June, no model clocked sales in excess of 15,000 units, even as Maruti’s aging workhorse Alto remained the leader clocking in sales of 14,856 units, a 6 percent drop compared to the same month last year.

Must watch: Another Tryst With Destiny! How GST Will Change Your Life After July 1

Hyundai’s Grand i10 and Creta, and Maruti Suzuki’s Dzire and Wagon R were the other four that reported a fall in sales in June. Maruti's Dzire is in ramp-up mode as the new model is getting dispatched to dealers and cannot be strictly compared to the older model, same month last year.

Maruti Suzuki launches all new Dzire. Built on a fifth generation B platform the Dzire is built using high tensile steel making it light weight to deliver better environmental performance and fuel efficiency.

The dream run of Maruti’s Baleno and Vitara Brezza continued unabated with growth of 30 percent and 24 percent, respectively. Their volumes remained unaffected because of their strong order book leading to waiting periods extending to 6-8 weeks.

Hyundai’s Elite i20, Maruti Suzuki’s Swift and Celerio were other models that reported a growth in sales in the last month. Maruti is testing the new Swift, which would be ready for launch later this financial year. The new Swift will be based on the same platform as the Baleno on which the current Dzire is also housed.

The biggest surprise last month was Tata Motors' Tiago. The compact hatchback, which is into its 15^th month of sales, climbed five spots to settle at the 13^th spot. Tiago, which sold just one unit less than Renault’s Kwid in June, grew 29 per cent, selling 5,438 units.

Of the 13 companies in total, only three companies — Maruti Suzuki, Honda and SkodaAuto — reported growth in the last month. Sales of Toyota Kirloskar crashed 85 percent, the most in recent years, followed by that of General Motors-owned Chevrolet.

With sales of just 1,973 units (as against 13,567 units) Toyota slipped through the rankings to settle at the 10^th spot compared to the 5^th spot in May. Renault's sales dipped 42 percent in June primarily due to the fall in demand for Kwid.

As per data shared by the Society of Indian Automobile Manufacturers, passenger vehicle volumes dipped 11 percent to 1,36,895 units — the sharpest drop since May 2013.

However, with a price reduction ranging from 2.5-14 percent on all cars and SUVs following the implementation of GST, consumers are expected to flock back to showrooms before the start of the festive season in the last week on August.