Sinking car sales flag economy woes

Sinking car sales flag economy woes

Monthly sales of passenger vehicles suffered their worst fall in more than seven years in April, data released on Monday showed, underlining worries about a slowdown in the economy.

Companies sold 17% fewer passenger vehicles — cars, autorickshaws, scooters and bikes — in April compared to a year earlier, their worst performance since October 2011. Domestic car sales slumped 20% to 1.6 lakh units.

Customers are finding it difficult to get car loans amid a crisis in the non-banking financial company (NBFC) sector sparked by defaults at IL&FS. Several NBFCs are reeling under stress.

Vehicle sales have also been hit by rising fuel prices and a new rule that says that car buyers need to pay for three years of insurance up front at the time of purchase.

“The not-so-happy news continues as the sentiment in the market is not good,” Vishnu Mathur, Director General of the Society of Indian Automobile Manufacturers, told reporters.

There is a decline across all automobile industry segments, the data showed.

Two-wheeler sales fell 16%, with scooters the worst performers.