Auto sales to dealerships fell 31 percent to 200,790 units in July, marking the ninth straight month of drop, data from the Society of Indian Automobile Manufacturers (SIAM) showed.
In July, total automobile sales fell 18.71 per cent at 1.82 million units, the steepest. In case of two-wheelers, which include scooters, motorcycles and mopeds, the sale edged lower by 16.82 per cent to 15,11,692 units.
Commercial vehicles, on the other hand, also witnessed one of the worst dips of 25.71 per cent to 56,866 units last month. The UV segment recorded a sales decline of 15.22 per cent at 67,030 units as compared to 79,063 units which were sold in the same month past year.
Overall, the sales of vehicles across all categories registered a decline of 18.71 percent at 18,25,148 units from 22,45,223 units in July 2018, revealed the SIAM data.
Industry leaders have warned of massive job cuts as manufacturers look to halt production.
This was also the ninth straight drop in monthly passenger vehicle sales.
"This time around, all the segments of the industry are reporting a decline in sales", SIAM director-general Mathur said. "The industry needs an urgent revival package from the government".
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The sales decline had dented production, causing job losses. He reckons that the decline in percentage terms may not be as severe as the base effect of the third quarter kicks in.
SIAM Director General Vishnu Mathur said nearly 15,000 jobs, mostly temporary and casual workers, have already been lost in automobile manufacturing companies over the last two to three months. Industry body Siam releases wholesales, or factory dispatches, of automobiles, and not retail sales.
It is to be known that India's S&P BSE auto sector index has fallen 23 per cent this year, resulting in declination of country's top automaker Maruti Suzuki's market valuation by 18.3 per cent. According to SIAM's estimates, dealerships have reduced 2.5 lakh jobs, while OEMs have cut 15,000 employees.
Total of 2,508,860 vehicles, including passenger, commercial, three-wheelers, two-wheelers & quadricycle were produced in July 2019 as against 2,818,986 in July 2018, recording decline of 11%. "If the government announces some relief package there could be a positive impact during the festival season". Most of these jobs are temporary and casual-level.
The Automotive Component Manufacturers Association of India (ACMA) has sought immediate government intervention such as slashing GST to stimulate demand. It has also affected the jobs of two lakh people.
Auto and two-wheeler makers tend to start adding to dealer inventory from August in anticipation of higher sales during the festival season, which starts with Onam in August and ends with Diwali in November. In 2008-09 and 2013-14, part of the automobile sector was a part of which was driving up sales.