NEW DELHI: India recorded an eighth successive month of falling car sales Wednesday, with June seeing a 25% decrease, adding to a multi-day slump in Indian stocks.
Industry data showed passenger vehicle sales falling 17.5% last month year-on-year to 225,732 units, with domestic car sales off 25%.
Sales of motorcycles dropped 9.6% to 1.1 million, according to figures from the Society of Indian Automobile Manufacturers (SIAM) quoted by the Press Trust of India.
The slide has been blamed on weak consumer sentiment in Asia’s third-biggest economy, with growth slowing in recent quarters and falling behind that of China.
In an interview with AFP last month, SIAM director general Vishnu Mathur called for a “stimulus package” for the industry from Prime Minister Narendra Modi’s newly re-elected government.
“This is the time when the government has to come forward and help the industry. It is a very challenging time the industry is facing right now,” Mathur told AFP.
The slump in demand has forced carmakers to halt production, with Mahindra & Mahindra shutting down its plant for 13 days in June.
The new figures sent shares in carmakers lower on the Indian stock market on Wednesday, contributing to another day of losses on the Sensex 50 index in Mumbai.
Some US$42 billion in market value has been erased since the government unveiled the first budget of its new term on Friday, Bloomberg News reported.
The reason is that a new tax rate applies not just to the super-rich but also to trusts used by a large number of foreign funds, Bloomberg said.