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India automakers suffer record sales slump in August as slowdown deepens

Industry bets on tax cut, festivals to spur demand

Sales of passenger vehicles plunged 32% to 196,524 units in August. (Photo by Takaki Kashiwabara)

MUMBAI (NewsRise) -- Passenger vehicles sales in India posted a record slump in August amid a persisting demand slowdown, even as uncertainty looms on the industry's long-standing demand for a tax cut on automobiles.

The automobile industry in Asia's third-largest economy has been struggling for months as consumers cut back on spending amid slowing economic growth and mounting fears of job losses. India's gross domestic product expanded at the slowest pace in five years in April-June as banks tighten credit in the face of ballooning bad debt levels. In a bid to cope with the persisting weak demand, automakers have slashed production and cut thousands of jobs.

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