New Delhi, Aug. 8: Car sales grew 5 per cent in July — the third straight month of growth — signalling a revival in demand. Experts, however, warned that it might be too early to celebrate as the surge could have been triggered by fears of tax increases.
According to data released by the Society of Indian Automobile Manufacturers (Siam), domestic car sales stood at 1,37,873 units in July this year compared with 1,31,257 units in the same month last year.
“The negative sentiments have gone. People are coming back to showrooms. As the economy revives, we are going to see higher growth in the coming months,” Siam director general Vishnu Mathur said.
Total sales of all types of vehicles grew 12 per cent to 15,86,123 units in July against 14,16,182 units in the same month last year.
While he declined to give an exact forecast for sales growth, Mathur said, “In the first quarter of this fiscal, we have grown 2.89 per cent. If the trend continues, we hope we could end the year with a growth of 5 -10 per cent.”
Auto experts said the industry should wait a couple of months to see this as a turnaround as the last two months saw some panic buying in anticipation of tax increases and the release of pent-up demand.
“For sustained growth, one would want to see six months of growth in disposable income over inflation and the increase in the levels of household savings,” said Kumar Kandaswami, senior director at Deloitte Touche Tohmatsu India Pvt Ltd.