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September passenger vehicle sales dive 24% as slowdown persists: SIAM

Car and auto component makers have cut thousands of jobs and halted some production

Reuters  |  New Delhi/Bengaluru 

cars

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

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

SIAM's data comes as the domestic 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 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 would maintain a cautious stance until October performance numbers are in.

Aggregate revenue for listed automobile 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 such as New India Assurance and ICICI Lombard General Insurance in the September quarter.

Last month, car such as 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 per cent drop in sales in September.

First Published: Fri, October 11 2019. 12:57 IST
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