Overall passenger vehicle sales declined 20.55% last month

Domestic passenger car sales fell 26.03 per cent to 1,47,546 units in May, data from industry body Society of Indian Automobile Manufacturers (SIAM) showed. Industry observers pointed out that a high base effect along with low demand and high interest costs continued to dent purchases. The data furnished by SIAM showed that passenger cars sales in the domestic market had stood at 1,99,479 units in May 2018.

Among other sub-segments of passenger vehicles, the number of utility vehicles sold in the country decreased 5.64 per cent to 77,453 units in May 2019. Sales of vans stood at 14,348 units last month, down 27.07 per cent compared to the corresponding period in 2018.

Overall passenger vehicle sales declined 20.55 per cent in May to 2,39,347 units from 3,01,238 units.

In the commercial vehicle segment, domestic sales were down 10.02 per cent at 68,847 units last month, according to industry body SIAM.

Similarly, the data pointed out that three-wheeler sales decelerated. The segment's offtake fell 5.76 per cent to 51,650 units last month.

In addition, overall two-wheeler sales - including scooters, motorcycles and mopeds - decreased 6.73 per cent to 1,726,206 units.

According to the SIAM data, total sales of the the country's automobile sector declined 8.62 per cent to 2,086,358 units across segments and categories in May 2019.

The sector has been moving towards inventory correction even as it invests in R&D for upcoming safety norms and electric vehicles, SIAM director general Vishnu Mathur said.

Overall exports of vehicles across categories were down 0.49 per cent at 396,833 units.

"Dwindling sales in passenger cars shows no signs of rebounding yet due to various factors like drying up financing resources with the NBFC troubles, election related impasse, high base number and BS VI expectations in a couple of quarters," said Sridhar V, partner, Grant Thornton India LLP.

"Many OEM's have plans afoot in cutting back production to reduce the inventory piling up at dealership. The segment is hoping for budget to throw some encouraging news."