Auto industry blues continue as car sales fall 36% in July

The year-long slowdown that has gripped the auto industry in India is becoming worse. Data from industry body Society of Indian Automobile Manufacturers (SIAM) shows that July sales of passenger cars—the largest segment by volume—fell 35.95% from a year ago as consumer sentiment remained low due to factors such as the transition from Bharat Stage (BS) IV to BS VI emission standards and fuel price volatility.

The data released on Wednesday shows that passenger cars sales fell to 122,956 units from 191,979 a year ago. Sales of the passenger vehicles segment including cars, utility vehicles, and vans fell 30.98%. Total sales fell 18.71% to 1,825,148 units from 2,245,223 units a year ago.

Sales of two-wheelers—the second-largest segment by volume—declined 16.82% to 1,511,692 units from 1,817,406. Three-wheelers sales fell 7.66%. Commercial vehicles sales—which have bucked the trend on occasions—fell 25.71% from 76,545 last year to 56,866. Total production, too, fell 11.00%. The only plus was exports growing 4.22% to 414,596 units from 397,805 last year.

In its quarterly review released last month, SIAM had said that the industry would be affected by the following challenges: “No GST benefits on internal combustion engine vehicles, no policy on vehicle scrappage, inventory liquidation, availability and affordability of finance and fuel prices volatility”.

Registration figures from SIAM and VAHAN, the national vehicle registry, also indicate low consumer sentiment. In July, passenger vehicles saw a 5.56% drop in registrations from 274,770 units a year ago to 259,481, while commercial vehicles saw a 7.76% drop from 78,335 units to 72,258. The two-wheeler segment was the least hit with a 1.38% decline.