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Thursday, Oct 24, 2019

India’s passenger vehicle sales plunge 24% in September amid slowdown in auto sector

Domestic car sales were down 33.4 per cent to 1,31,281 units last month as against 1,97,124 units in September 2018, according to data released by the Society of Indian Automobile Manufacturers (SIAM) on Friday.

business Updated: Oct 11, 2019 12:54 IST
Reuters
Reuters
New Delhi/ Bengaluru
India’s domestic passenger vehicle sales continue to drop.
India’s domestic passenger vehicle sales continue to drop.(File Photo )
         

India’s passenger vehicle sales slumped 23.7% in September, the eleventh straight month of declines, prompting an industry body to flag more job cuts if sales failed to pick up soon.

Passenger vehicle sales dropped to 223,317 units in September, the Society of Indian Automobile Manufacturers (SIAM) data showed, while passenger car sales dived 33.4% to 131,281 units.

SIAM’s data comes as the domestic automobile industry faces a crippling slowdown in demand that has led to production cuts and thousands of job losses. The industry is seeing its longest ever streak of sales decline.

“We are preparing for best-case and worst-case scenarios ... worst case there will be more production and job cuts,” said SIAM president Rajan Wadhera.

Car and auto component makers have cut thousands of jobs and halted some production as the industry grapples with various challenges amid a broader economic slowdown. The government stepped in last month, announcing a corporate tax rate to boost manufacturing and lift growth.

On Friday, SIAM’s Wadhera said it expected some improvement in the situation on the back of the festive season.

However, Wadhera refrained from giving out a forecast for future sales, saying SIAM would maintain a cautious stance until October performance numbers are in.

Aggregate revenue for listed automobile companies is estimated to have dropped by one-fourth in July-September, CRISIL, the Indian arm of S&P rating agency, said in a note on Thursday.

The drop in auto sales is also expected to hit earnings for insurance companies such as New India Assurance and ICICI Lombard General Insurance in the September quarter.

Last month, car companies such as Maruti Suzuki India Ltd have lowered prices on some models, responding to the government’s move to cut corporate taxes in a bid to revive economic growth.

The company saw a 24.4 % drop in sales in September.

First Published: Oct 11, 2019 11:34 IST

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