India’s domestic passenger vehicle sales in July dived at the steepest pace in nearly two decades, an auto industry body said on Tuesday, as a financing crunch deepened a crisis in the country’s autos sector and triggered large-scale job losses, reports Reuters.
Sales of passenger vehicles to car dealers plunged 30.9 per cent to 200,790 in July, the ninth straight month of declines, data released by the Society of Indian Automobile Manufacturers (SIAM) showed.
The drop in sales is the worst since December 2000, when the industry sold a fifth of the vehicles it sells currently.
The crisis in the autos sector presents a major problem for Prime Minister Narendra Modi’s government, just as he begins his second term in office, as the sector accounts for nearly half of India’s manufacturing output.
The auto industry employs over 35 million people directly and indirectly.
“If this industry goes down, then everything gets hurt. Manufacturing, jobs and revenue to the government,” Vishnu Mathur, director general, SIAM, told reporters on Tuesday, adding that car and motorcycle manufacturers have already slashed about 15,000 jobs.
The pace of decline has accelerated in recent months, as a liquidity crunch in India’s shadow banking sector has dried up lines of credit to both auto dealers and potential car buyers.
Reuters reported last week that companies in the sector - which includes manufacturers, auto parts makers and dealerships - have so far cut as many as 350,000 jobs.