DN: ‘Motor industry yet to see Budget tax impact’

The effects of the tax changes announced in Budget 2018 on November 9, 2017 for the motor industry are yet to take effect, said J. B. Securities in their monthly review of the industry.

It says that the registrations in November were lackluster except for a pickup in small hybrid cars. Motor cars segment recorded 2,439 units in November up from 1,961 units in October but significantly down from 3,574 units 12 months ago.

In the brand-new segment volumes slumped to a 24-month low of 473 units in November down from 582 units in Oct and 2,098 units 12 months ago. Pre-owned cars recorded 1,966 units significantly up from 1,966 units in Oct and 1,476 units 12 months ago. The exceptional growth came from Suzuki Wagon R which has a 658cc hybrid engine thus under the unit method attracts a lower level of duty.

Premium motor cars recorded 82 units of which 55 were new and 27 preowned, it was lower at 62 units in Oct and 73 units 12 months ago. In the brand new segment MB recorded 27 units in the preowned segment MB accounted for 10 units.In the SUV segment 600 units were registered up from 407 units in Oct and 477 units 12 months ago.

Hybrid registrations were 2,049 units up from 1,405 units in Oct and 1,605 units 12 months ago. Motor cars accounted for 1,707 units, SUVs 322 units followed by vans accounting for only 1 unit. Of the total 1,025 units have engines of size 650cc, 909 units have engines between 1L and 1.5L and only 99 units have engines larger than 1.5L. Electric car registrations have slumped to 5 units slightly up from 3 units in Oct and down from 24 units 12 months ago. Twenty four months ago the figure was 242 units.

Van registrations recorded 569 units slightly down from 589 units in Octonber and significantly up from a mere 100 units 12 months ago. Volumes are being driven by micro vans with 650cc engines that account for 380 units.

3-wheeler registrations were 2,265 units slightly up from 2,155 units and significantly down from 6,098 units 12 months ago. As a point of reference 2 years ago the figure was 10,494 units.

The main reason for the slump is the 25% LTV ceiling imposed by the Central Bank on lenders holding back credit extension.

The 2-wheeler registrations were 28,272 units slightly down from 28,786 units in October and down from 32,082 units 12 months ago. Scooters accounted for 15,241 units.

Pickup trucks recorded 164 units up from 138 units in Oct and significantly down from 529 units 12 months ago.