Continuing its prolonged sales slump, passenger vehicle (PV) sales, which include cars, SUVs and vans, continued to show negative graph in June as automakers curbed factory dispatches to control rising inventory at dealerships.
Car sales alone were down 24.97 per cent to 1,39,628 units as against 1,83,885 units in June 2018, according to Society of Indian Automobile Manufacturers or Siam data, the top lobby body, showed.
Auto experts said the fall in automobile sales were due to lack of liquidity in the financial system, decline in overall economic activity and an increase in prices of vehicles across segments.
“The automobile industry has not seen such decline in sales in recent years, but there is hope of recovery because of the upcoming festival season and availability of financing options,” Rajan Wadhera, President at Siam, and also President, Automotive Sector at Mahindra and Mahindra, India’s largest utility vehicles maker, said.
He said the automakers are in a situation where their costs are more than their sales revenues.
Earlier, Maruti Suzuki, India’s biggest car maker, commanding over 50 per cent market share, cut production for a fifth straight month in June on surging inventories at dealerships, indicating a slowing economy.
Automobile sales in India are counted as factory dispatches and not retail sales.
Automakers are worried as the market showed no visible signs of recovery yet as PV sales fell 18.42 per cent year-on-year during the April-June quarter of FY20.
In June, sales of commercial vehicles were down 12.27 per cent to 70,771 units as against 80,670 units in the same period a year ago, Siam said.