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.