India's car market has been growing at a healthy clip of 12-16 per cent per annum. Passenger vehicle sales in April - May this fiscal have grown at 13.28 per cent. So what explains the sudden spurt of 28 per cent in passenger car sales for the top 7 car makers in June, 2018 over June, 2017? The biggest - Maruti, grew by over 36 per cent, Tata by 54 per cent and M&M by 26 per cent. The answer lies in the low base-effect.
June, 2017 sales were particularly subdued as customers deferred purchases and dealers reduced stocks due to the uncertainty over the likely impact of GST introduction from July 1, 2017. Not to forget that the impact of DeMo on car sales was still lingering since November, 2016. The previous June, sales for the top 7 car makers were down 17 per cent against the previous month, which made the June 2018 numbers look far healthier and unusual than they are.