Festive demand, tax cut power up auto sales in Sep

Powered by tax cuts and festive spirits, automobile sales took off in September, cheering manufacturers across the board.

- Ayaan Kartik

Tata Motors Ltd, Mahindra and Mahindra Ltd and Maruti Suzuki India Ltd reported their best monthly numbers, while Hyundai's top-selling SUV Creta saw its highest monthly sales. Two-wheeler makers Bajaj Auto Ltd and Hero MotoCorp Ltd saw just 5% annual growth in domestic sales, while TVS Motor Co. reported a 12% jump.

Retail car sales broadly rose 10%, with Tata Motors seeing the highest sales growth of 45%.

However, Mahindra and Maruti also highlighted problems due to the limited availability of trailers to ship cars from factories to dealerships. Due to logistics constraints, Maruti saw its wholesale dispatches fall by 8% to 135,711.

Maruti Suzuki, Tata Motors, Mahindra and TVS Motor credited festive buying and the reduction in tax rates as the prime reasons for the sales surge.

For most small cars, goods and services tax (GST) was cut from 28% to 18%, and from 45-50% to a flat 40% for large SUVs after the GST council approved the tax cut last month.

While both Tata and Mahindra saw a surge in wholesale dispatches with their best monthly sales at 59,667 and 56,233, Maruti recorded its best retail sales of 173,500 cars, up 27.5% from a year earlier.