USED CV SALES SEE UPTURN AMID AUTO SECTOR DROP

Commercial Vehicles Line Up at ShriramAutomall

Indian new commercial vehicle sales is witnessing a slowdown, whereas, those of used vehicles are seeing a momentum. This is mainly due to a pick-up in demand of LCV and ICV and the key reason is realisation. According to industry estimates, unorganised sector is selling five times of what organised sector is selling, 10,830 units a month.

According to a report from Shriram Automall, which holds 60-70 percent market share in the organised second-hand CV market, its price realisation has gone up by 15-20% from last year. However, slowing down in used heavy CV's, resulted in unit-wise sales drop by around 13 percent. Sameer Malhotra, CEO, Shriram Automall, says, last year, realisation for small vehicles increased to around Rs. 1.4lakh from Rs.1.2lakh, from Rs.2.15lakh to Rs.2.7lakh for LCV's and from Rs.3.5lakh to Rs.4lakh for HCV's.

On the other side, average overall sales which used to be around 8,000 units a year ago has dropped to 7,000-7,500 units in a month. Also, the overall volume of new vehicles of India's top four M&HCV makers fell by 59.5percent. In a developed country, the ratio of heavy trucks to light CV's is normally 1:3. In India, the ratio is not even 1:2, which, means there is more room for growth in LCV's.

M&HCV sales are seeing pressure due to various issues like new loading norms, turnaround time of trucks having increased after the goods and services tax and liquidity remaining a challenge. There is always a lag time between announcement and execution. Freight rates have not gone up, though there has been a rise in fuel prices. Due to this, there is consolidation in the industry and a lot of big players will play a wait-and-watch game or form alliances to hedge against further downtrend, said Sameer Malhotra.

According to Umesh Revankar, managing director at Shriram transport Finance (STFC), one of the country's largest CV financiers, his company should be able to grow 10 percent over the previous year on used vehicle disbursements. To support the target, the company has decided to increase penetration in rural areas.

The total in assets under management (AUM) of the new vehicles business at STFC during quarter ended June dropped by 5.7 percent to Rs.11,450 crore, from Rs.12,137 crore in the same period last year. However, the AUM for used vehicles grew by 6.7 percent to Rs.89,021 crore.

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GST AND ITS EFFECTS ON PRE-OWNED VEHICLE MARKET!

Today is a historic day for our country. GST has finally been rolled out. Our dream of one nation one tax has come true. All the multiple state and central taxes go out and are replaced by with a single levy. Cars falling under luxury bracket will attract 28% flat GST. Over and above, an extra cess of 1, 3 or 15 per cent is proposed depending on the classification of cars. This has brought the earlier tax hit down making these cars marginally cheaper. Two-wheeler prices are also expected to come down owing to the lowering in the total tax imposed on these vehicles.

However all vehicles are not going to get cheap. Bikes above 350cc are going to get expensive by a margin. All Enfield fans may have to shell out more from their pockets to own the beast on the road. Billing has stopped on most OEMs as they are migrating to new GST rollout and recalculating the offered prices but as we see it, GST is going to help most Indians with uniformity in Tax structure.

For people not looking out for new vehicle purchase, used car space is something they can always bank on.  For Used cars tax is only on the marginal amount of the used car not on the total value of the car. Used cars transaction between individuals or by individual to a firm won’t be treated as taxable transaction under GST, but firm will be liable to pay the GST under transaction with the individual.

The tax will apply only on cars sold by registered vendors. The GST rates for second-hand car transactions will be the same as the new cars of the same make i.e. 29% for small cars or 43% for all the other cars. With the biggest name in this field, Shriram Automall always helps customers looking for pre-owned vehicles in top condition to make them own the vehicle of their dream.

As per government norms, The Company is also replacing their existing Service tax rate of 15% by GST rate of 18%. Shriram Automall is the no.1 solution provider for providing used vehicles in good quality and at optimal prices. The company has made the complete process so easy and accessible by providing the large number of inventories at a single place.

So, if you are looking forward to buy used vehicles, ShriramAutomall is right choice which provides you best of their services while making your experience both easy and comfortable. Click the Link below to register.

 http://bit.ly/2c2UwQN

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