Slump in Car Sales Shows Pain Persists for Modi’s Economy
(Bloomberg) -- Passenger vehicle sales in India slumped 49.6% in June, the first full month of economic activity after a two-month nationwide lockdown, extending a lengthy slowdown in the country’s auto sales.
Local companies sold 105,617 cars and SUVs, compared with 209,522 in June 2019, data released by the Society of Indian Automobile Manufacturers showed Tuesday. Sales slid 78.4% to 153,734 units for the three months through June. In a break from tradition, SIAM hadn’t previously announced sales for April and May, when India was largely locked down because of the coronavirus pandemic.
The numbers provide a glimpse into economic activity in Asia’s third-largest economy, which has struggled to compile official figures on key indicators as strict stay-at-home measures to contain the virus affected data collection. Prime Minister Narendra Modi, fighting the nation’s worst economic downturn in decades, opened up most activities last month in an effort to revive sentiment and growth.
Sales of motorcycles and scooters weren’t hit quite so hard, falling 38.6% in June as the rural economy was cushioned to a degree by healthy monsoon rains and government support measures.
It will take as many as four years for India’s automobile industry to reach volumes last seen in the year to March 2018, and even that estimate is optimistic, Rajan Wadhera, president of SIAM, told reporters. Companies will not invest in new products or production capacity, and plans for electric vehicles may also take a hit, Wadhera said.
India’s car market is dominated by the local units of Japan’s Suzuki Motor Corp. and South Korea’s Hyundai Motor Co. U.S. automaker Ford Motor Co. has largely failed to capture the market, where lower-end and cheaper vehicles with limited accessories have traditionally thrived, while General Motors Co. stopped sales in the Indian market in 2017.
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