NEW DELHI/BENGALURU (Reuters) - India’s passenger vehicle sales slumped 23.7% in September, the eleventh straight month of declines, prompting an industry body to flag more job cuts if sales failed to pick up soon.
Passenger vehicle sales dropped to 223,317 units in September, the Society of Indian Automobile Manufacturers (SIAM) data showed, while passenger car sales dived 33.4% to 131,281 units.
SIAM’s data comes as the domestic automobile industry faces a crippling slowdown in demand that has led to production cuts and thousands of job losses. The industry is seeing its longest ever streak of sales decline.
“We are preparing for best-case and worst-case scenarios ... worst case there will be more production and job cuts,” said SIAM president Rajan Wadhera.
Car and auto component makers have cut thousands of jobs and halted some production as the industry grapples with various challenges amid a broader economic slowdown. The government stepped in last month, announcing a corporate tax rate to boost manufacturing and lift growth.
On Friday, SIAM’s Wadhera said it expected some improvement in the situation on the back of the festive season.
However, Wadhera refrained from giving out a forecast for future sales, saying SIAM would maintain a cautious stance until October performance numbers are in.
Aggregate revenue for listed automobile companies is estimated to have dropped by one-fourth in July-September, CRISIL, the Indian arm of S&P rating agency, said in a note on Thursday.
The drop in auto sales is also expected to hit earnings for insurance companies such as New India Assurance and ICICI Lombard General Insurance in the September quarter.
Last month, car companies such as Maruti Suzuki India Ltd (MRTI.NS) have lowered prices on some models, responding to the government’s move to cut corporate taxes in a bid to revive economic growth.
The company saw a 24.4 % drop in sales in September.
Reporting by Manoj Kumar in New Delhi and Chris Thomas in Bengaluru, Editing by Sherry Jacob-Phillips