MUMBAI -- Indian new-vehicle sales declined in 2019 for the first time in five years as economic growth and lending slowed, knocking the country down one spot in market size to fifth place behind Germany.
Sales shrank 13% to just over 3.81 million vehicles, with market leader Maruti Suzuki suffering a 19% drop on the year during the April-December period.
Yet recent monthly totals offer hope that the worst is over. New-vehicle sales in December fell just 4% to about 300,000 autos, the Society of Indian Automobile Manufacturers said Friday.
At a Maruti Suzuki dealership in Mumbai early this month, a salesperson touted discounts to convince prospective buyers.
"We'll take 10,000 rupees ($140) off for the Wagon R, or 25,000 rupees for the Swift Dzire," the representative said.
South Korea's Hyundai Motor, which ranks second in India's market, logged an 8% decrease for April-December. Local players like Tata Motors also struggled, as sales dipped for all major automakers except France's Renault.
India's car market has faced unprecedented headwinds since fall 2018, after auto loans became harder to come by amid credit concerns in the country's nonbank sector. Rising auto insurance premiums last year cooled consumer sentiment.
A rapidly slowing economy also took a toll. India's real gross domestic product growth has shrunk for six straight quarters, coming to 4.5% in the July-September quarter. The government projects a 5% growth rate for the fiscal year that ends in March.
"Sales plunged in the latter half of 2018, and continued to go down in 2019. They haven't recovered yet," said an executive at a Japanese company that trades with automakers.