India’s August Auto Sales Down 19%, Worrying Officials image

Auto sales in India fell in August for the first time over the past 10 months and motorcycle sales also decreased for the first time since January 2009.

Many automakers saw themselves forced to make production cuts and make temporary shutdowns in the past three months due to decreased demand and sluggish economy in Asia’s third-largest market.

“Now we are entering a desperate zone,” said Sugato Sen, senior director of the Society of Indian Automobile Manufacturers (SIAM). “If the negative trends continue in September as well, we will have to revise our targets downwards.”

India also reached its lowest export rate in 11 years, with a drop of 26.83% in August. The Society of Indian Automobile Manufacturers requested the government a stimulus package like the one offered in the 2008-2009 downturn, as the economy is entering a desperate period. In August auto sales dropped 3.9% to 13,54,436 units, with domestic sales accounting for 1,18,142 units, down from 1,45,066 units in August 2011.

Exports were also down 26.83% to 36,104 units, and the previous lowest decline was reported in March 2001, when overseas shipments decreased 48.37% to 2,221 units. According to SIAM Senior Director Sugato Sen if the government doesn’t offer a stimulus package quickly, the entire economy is going to be severely affected.