Indian car sales slump in June

India's car sales plunged by nearly half in June against a year earlier, despite the government relaxing curbs on businesses and individuals to spur economic activity after its four-month Covid-19 lockdown. The slump in new sales, now into its second year, will affect short- to medium-term demand for motor fuels.

Suzuki, the country's largest auto producer, posted a 54pc fall in domestic passenger vehicle sales last month. Hyundai, India's second-largest producer, saw sales fall by 49pc, according to data provided by the companies. Toyota, which mainly sells sports utility vehicles in India, posted a 64pc drop in sales. Passenger car sales totalled around 117,000 vehicles in June with Suzuki accounting for around 51,000 and Hyundai 21,000, according to preliminary data.

The fall in sales was partly because of the impact of Covid-19 but also decade-low economic growth. The IMF forecasts India's GDP to contract by 4.5pc in 2020 but expand by 6pc in 2021 compared with 4.2pc growth in 2019.

Indian diesel sales fell to 1.32mn b/d in May compared from 1.87mn b/d a year earlier, according to preliminary oil ministry data. Gasoline demand dropped to 482,000 b/d from 746,000 b/d the previous year.

Tata Motors and Jaguar said that sales of passenger vehicles fell by 14pc in June from a year earlier. Mahindra & Mahindra reported a 57pc drop in passenger vehicle sales and a 36pc slump in commercial vehicle sales.

But tractor sales firmed as monsoon rainfall and an increase in agriculture activity spurred sales. Mahindra Tractors' sales rose by 12pc last month from a year earlier, while Escorts Tractors increased its sales by 23pc.

By S Dinakar