Car Sales Drop 11% in India

Passenger car wholesales in India fell 11% to 186,000 units in June, ending six months of strong year-on-year growth. But LMC Automotive says volume is likely to improve this month and could end the year with a 10% gain to 3.1 million units.

Sales in January-March climbed 11% year on year. Growth slowed to 5% in the second quarter, resulting in a net gain of 8% to 1.45 million factory shipments to dealers in the first half of 2017.

Last month’s decline reflected dealer worries about the negative impact of India’s new goods and sales tax, which took effect on July 1, LMC Senior Manager Ammar Master tells AutoBeat Daily.

Master predicts dealer demand will revive through August as consumers adjust to the new tax scheme, and retailers replenish their inventories. LMC forecasts that wholesales will grow at a compound annual rate of 8% over the next seven years. That pace would carry the market to nearly 5.3 million units by 2024, Master says.