Domestic automobile sales plunge 18.71 per cent in July 2019, the worst in nearly 19 years
India’s passenger vehicle industry suffered its worst sales performance in nearly 19 years in July as a slowing economy, higher ownership costs and floods in some states deterred buyers. In July, passenger car sales plunged 36% to 122,956 units, while utility vehicles recorded a 15% drop to 67,070 units. Vans suffered a 46% decline to 10,804 units. Industry body Siam releases wholesales, or factory dispatches, of automobiles, and not retail sales.
The drop in sales of utility vehicles came despite the recent introduction of models such as Mahindra and Mahindra Ltd’s XUV300, Hyundai Motor India Ltd’s Venue and MG Motor India Ltd’s Hector models. The new models have seen robust demand despite a weakness in the overall market.
Weak domestic economic activity and escalating global trade tensions led the Reserve Bank of India to cut India’s growth projection for 2019-20 to 6.9% last week from its June forecast of 7%. A liquidity crunch caused by a shadow banking crisis since late 2018 has exacerbated the woes of the auto industry. Severe floods in key states such as Maharashtra, Kerala and Karnataka before the onset of Onam and Ganesh Chaturthi are also impacting the fortunes of the automobile industry.
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