Latest data shows that volumes through to July falling 12% year on year to 1.73 million vehicles.

The demand for passenger vehicles declined 9% year on year to 1.41 million units, while light commercial vehicles up to GVW 6 tonnes plunged 24% year on year to 323k.

In July alone, total industry volumes decreased by 11% year on year to 221k. This was divided between 171k passenger vehicles (‐9% year on year) and 50k light commercial vehicles (‐16%).

On a seasonally adjusted annualised rate basis (SAAR), sales in India were at 2.71 million units in July, or lower than 3 million units in June. The July selling rate was also the lowest in the year so far.

‘In this time of economic gloom, higher costs of financing, and depleting discretionary income, India’s vast middle class are holding back the purchase of vehicles – still considered more a luxury than a necessity by the majority,’ said Ammar Master, senior market analyst for India at LMC Automotive. ‘This is most evident in the continued slide of mini and sub‐compact cars. In addition, many buyers of larger vehicles and luxury cars are also now deferring purchases.’

Industry body SIAM (Society of India Automobile Manufacturers) is calling for a government incentive package, possibly similar to the duty reductions implemented in 2008.

Commenting on its forecast for 2013 sales, LMC said: ‘We have progressively reduced our outlook for India through this year because of the worsening economic situation and sentiment. We started the year with a sales forecast of 3.56 million units for 2013, but had to cut it to three million units.

‘However, the deterioration of India’s financial markets has accelerated, which is prompting us to consider further downward revisions in our India sales forecast.’