New-Car Wholesales Plummet 41% in India

Factory shipments of new cars in India plunged 41% to a “very dismal” 115,000 units in August, according to final figures from the Society of Indian Automobile Manufacturers.

Results, which were far worse than initial estimates, marked the fifth consecutive month of double-digit decline. Together, they describe the worst sales drop since at least 2000.

August year-on-year sales plummeted 36% for market leader Maruti Suzuki India and 49% for Tata Motors. Declines were even more severe for most other carmakers, who have been cutting production for months.

Passenger vehicles weren’t the only sector to report the shrinkage last month. Sales of two-wheelers, considered a good gauge of the India’s economy in rural areas, dropped 22%. Demand for commercial trucks plunged 39% last month.

Analyst blame the drop on India’s slowest economic growth in six years and defaults among non-bank financing services that provide credit for roughly half of new-car purchases in the country.