Sagging auto sector sales showed signs of revival in September on account of depreciation benefits and heavy discounts. “Depreciation benefits and discounts have helped a little bit in increasing sales in September in comparison to August,” said Sridhar V., Partner, Grant Thornton India LLP. “New introductions have also been instrumental in the slight recovery in passenger car and two-wheeler sales in September 19 over August 19, while the YoY numbers indicate the extremely cold nature of the market. The market is yet to see the recovery mode set in.” Additionally, the immediate price reduction due to lowering of effective corporate tax rate to 25.17 per cent (inclusive of all cess and surcharges) from 30 per cent for all domestic companies has helped to deepen discounts and drive-in some extra sales numbers. The auto industry is facing a severe demand slowdown on account of high GST rates, farm distress, stagnant wages and liquidity constraints. The sales and production have plunged dramatically, leading to job losses. In August, all major Original Equipment Manufacturers (OEMs) comprising passenger, commercial, two and three-wheeler manufacturers reported massive decline in domestic sales.

(Economic Times)