Sales of passenger cars, the largest segment by volumes, slumped 24.07% to 139,628 units in June from 183,885 a year ago, according to data from Society of Indian Automobile Manufacturers (SIAM) released on Wednesday.

The auto industry has been struggling for more than a year now due to factors such as rising fuel prices, transition from Bharat Stage (BS) IV to BS VI and muted consumer sentiment. The passenger vehicles segment including cars, utility vehicles, and vans fell 17.54%. Overall sales fell 12.34% to 1,997,952 units in June from 2,279,186 units a year ago, according to data released by the industry body.

Two-wheelers, the second-largest segment by volumes, took a hit of 11.69% drop in sales to 1,649,477 from 1,867,884 units. Three-wheelers sales also dropped 8.79%. In the commercial vehicles segment—the only segment to show some uptick in March—sales dropped 12.27% from 70,771 to 80,670.

Total production in June fell 12.98% to 2,336,138 units from 2,684,725 while exports showed some revival. Total exports grew 1.03% to 399,228 units from 395,163 last year.

According to SIAM, the auto industry is looking forward for a revival in economic growth and the long-term growth story remains intact. The industry body said that going forward some of the growth enablers could be political stability, BS VI pre-buy, road projects, and infrastructure development. The challenges include “no GST benefits on internal combustion engine vehicles, no policy on vehicle scrappage, inventory liquidation, availability and affordability of finance and fuel prices volatility”. Despite these, it said “the auto industry is committed to implementing safety and emission norms for the benefit of customers, and the industry is getting ready for the implementation of BS VI emission norms”.

In its quarterly review of the industry, SIAM reported that all segments were down in the first quarter of 2019-20. It added that within passenger vehicles, cars and utility vehicles were largely impacted by a slowing economy, low consumer sentiment and finance availability. A drop in rural demand and an increase in insurance cost contributed to falling sales in the two-wheeler segment. Making anti-lock braking system mandatory for new registrations was also a reason. Commercial vehicles sales, SIAM said, were impacted by pick-up sales, consumer durable sales, crop production. “Growth in e-commerce business and warehouse consolidation has led to demand of ICVs (intermediate commercial vehicles) for movement of goods from warehouses to consumption centres,” SIAM added.

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