New Delhi: Auto majors Maruti Suzuki India, Honda Cars and Mahindra posted double digit growth in the domestic sales of their passenger vehicles in May on the back of new models and utility vehicles.
Ford also reported strong growth for the month while, Toyota Motor Corporation saw its domestic sales drop during the period.
Market leader MSI said its domestic sales increased by 15.5 per cent during the month to 1,30,676 units, as against 1,13,162 units in May 2016.
The company's sales were driven by the entry level cars, compact hatchbacks and utility vehicles (UV).
Sales of its mini segment cars, including, Alto and WagonR, increased 18.1 per cent to 39,089 units from 33,105 vehicles in the year-ago month.
The company said sales of the compact segment comprising Swift, Estilo, Dzire, Baleno and Ignis increased 10.1 per cent to 51,234 units in May as against 46,554 units in the same month last year.
Besides, sales of utility vehicles, including S- Cross and Vitara Brezza surged by 66.3 per cent to 22,608 units.
Mahindra & Mahindra posted 10.89 per cent increase in domestic sales at 40,602 units last month compared with 36,613 units in May 2016.
M&M President Automotive Sector Rajan Wadhera said the projections of a good monsoon and focused investments in rural sector is expected to spur demand.
"We have a robust outlook for future... At Mahindra, we look forward to growth momentum on the back of our existing product portfolio as well as upcoming new products," he added.
Wadhera further said the implementation of Goods and Services Tax from next month will be a significant game changer, and hoped it would benefit the auto industry.
Honda Cars India Ltd (HCIL) saw its domestic sales rise 13.3 per cent to 11,278 units in May.
"We continue to receive strong demand for New City and Honda WR-V," HCIL President and CEO Yoichiro Ueno said.
The government's plan for timely rollout of GST and a better monsoon forecast will aid in sales growth in the coming months, he added.
Similarly, Ford India reported 16.64 per cent rise in domestic sales at 6,742 units last month as against 5,780 units in May last year.
On the other hand, Toyota Motor Corporation saw its sales dip by 13.48 per cent to 10,914 units as against 12,614 units in May last year.
Toyota Kirloskar Motor Director and Senior Vice-President - Sales & Marketing N Raja said ambiguity surrounding the proposed GST structure made customers postpone vehicle purchasing plans.
"We expect this impact to magnify in June 2017 until the customers have a clear understanding of the final pricing post the GST rollout," he added.
Raja further said the company expected the government to review the proposed tax structure, under the GST regime, for greener vehicles such as electric, hybrid to achieve cleaner mobility solutions.
"We do hope the government will continue to extend the prevailing tax benefits for greener technologies which are purely based on the fuel efficiency and eco-friendliness," he added.
Under the proposed GST rates, hybrid vehicles are to be taxed at 28 per cent with 15 per cent cess, same as that of other large luxury cars and SUVs. Under the GST, the tax incidence on hybrid vehicles will go up to 43 per cent from the current level of effective tax rate of 30.3 per cent.
In the two-wheeler segment, country's largest two-wheeler maker Hero MotoCorp reported 8.7 per cent increase in sales at 6,33,884 units in May.
Niche bike maker Royal Enfield reported a 24.87 per cent jump in total sales at 60,696 units in May. It had sold 48,604 units in May 2016.
India Yamaha Motor reported 10.65 per cent increase in sales at 69,429 units in May.