- Title: India's passenger vehicle sales drop at steepest pace in nearly two decades
- Date: 13th August 2019
- Summary: NEW DELHI, INDIA (FILE) (REUTERS) VARIOUS OF TRAFFIC
- Embargoed: 27th August 2019 11:42
- Keywords: SIAM passenger vehicles auto sales India government New Delhi revival package
- Location: NEW DELHI/ CHENGALPATTU, TAMIL NADU/GREATER NOIDA, UTTAR PRADESH, INDIA
- City: NEW DELHI/ CHENGALPATTU, TAMIL NADU/GREATER NOIDA, UTTAR PRADESH, INDIA
- Country: India
- Topics: Economic Events
- Reuters ID: LVA006AS1VKUN
- Aspect Ratio: 16:9
- Story Text: EDITORS PLEASE NOTE: THIS EDIT CONTAINS HIGH DEFINITION MATERIAL
India's domestic passenger vehicle sales in July dived at the steepest pace in nearly two decades, an auto industry body said on Tuesday (August 13), as a financing crunch deepened a crisis in the country's autos sector and triggered large-scale job losses.
Sales of passenger vehicles to car dealers plunged 30.9% to 200,790 in July, the ninth straight month of declines, data released by the Society of Indian Automobile Manufacturers (SIAM) showed.
The drop in sales is the worst since December 2000, when the industry sold a fifth of the vehicles it sells currently.
The crisis in the autos sector presents a major problem for Prime Minister Narendra Modi's government, just as he begins his second term in office, as the sector accounts for nearly half of India's manufacturing output. The auto industry employs over 35 million people directly and indirectly.
"If this industry goes down everything gets hurt, the employment gets hurt, the manufacturing GDP (Gross domestic product) gets hurt, the revenues to the government gets hurt," Vishnu Mathur, director general, SIAM, told reporters on Tuesday, adding that car and motorcycle manufacturers have already slashed about 15,000 jobs.
The pace of decline has accelerated in recent months, as a liquidity crunch in India's shadow banking sector has dried up lines of credit to both auto dealers and potential car buyers.
India's jobless rate climbed to 7.51% in July from 5.66% a year earlier, according to private data group CMIE.
The latest auto sales figures imply that India's GDP growth that has already slid to a near five-year low, is likely to show signs of further erosion for April-June when fresh data will be released later this month.
The downturn - regarded by industry executives as the worst ever suffered by the Indian auto industry - has already sent the S&P BSE auto sector index tumbling more than 23% this year, while shares of the country's top carmaker Maruti Suzuki have slumped more than 20% since the beginning of 2019.
The domestic autos industry asked for tax breaks and easier access to finance for dealers and buyers at a meet with Indian government officials last week.
Motorcycle and scooters sales fell 16.8% to about 1.51 million units, while passenger car sales dived 36% to 122,956 units, the data showed. Commercial vehicles sales plunged 25.7% to 56,866 units, SIAM said.
The data also showed that domestic passenger vehicle production was down nearly 17% in the month.
"We are hopeful that some package will come out very soon," Mathur said.
($1 = 71.0950 Indian rupees)
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