Passenger vehicle sales in India dropped 17% in April - their worst monthly fall in nearly eight years, data from an industry body showed on Monday, as weak sentiment, high insurance costs and a liquidity crunch dented car sales.
Sales of passenger vehicles dived to 247,541 in April versus 298,504 a year earlier, data released by the Society of Indian Automobile Manufacturers showed. Two-wheeler sales dropped 16.4% to about 1.6 million vehicles.
Last month, the country's biggest automaker Maruti Suzuki Ltd said it sold 458,479 vehicles in the three months ended March 31, down 0.7 per cent on-year, and forecast a weak rate of growth for the current fiscal year.
Experts suggest that April's decline can be reasoned with three factors. Firstly, the fluctuating prices of fuel in the country has proved to be a problem since the past few months. Secondly, the bump in insurance costs has also discouraged numerous buyers. However, the most important reason agreed upon a majority of experts is the onset of general elections. The uncertainty of norms that could be put into place once the new government comes into power, has forced several buyers to hold their purchase decisions.
Ravi Bhatia, president, JATO India - a global automotive data insights and analytics company explained, "The automotive industry is undergoing a tough phase where multiple forces are causing severe headwinds. After a disappointing first quarter, the sales in April were disappointing once again. The sales are unlikely to improve in the near future and will remain weak for the next 12-18 months."
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