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India passenger vehicle sales fall for 2nd month as floods in Kerala hurt demand

Sales declined 2.5% as the southern state accounted for 8% of volume

Sales of SUVs recorded a 7.1% drop to 73,073 units last month, as demand for models such as Maruti Suzuki India’s Vitara Brezza shrank.   © Hindustan Times/Getty Images

MUMBAI (NewsRise) -- Passenger vehicle sales in India dropped for the second straight month in August after massive floods in the southern state of Kerala crimped demand.

Sales of passenger vehicles, including cars, sport-utility vehicles, and vans fell 2.5% year-on-year to 287,186 units last month, according to data from industry group Society of Indian Automobile Manufacturers, or SIAM.

Kerala was affected by the worst floods in a century last month, killing scores of people and forcing hundreds of thousands to abandon their homes. The calamity wreaked damages worth billions of dollars, bringing life in the state to a grinding halt. According to CLSA, Kerala accounted for 8% of the passenger vehicle sales volumes in India.

Sales of SUVs recorded a 7.1% drop to 73,073 units last month, as demand for models such as Maruti Suzuki India's Vitara Brezza, Jeep's Compass, and Hyundai Motor's Creta shrank. Car sales fell 1% to 196,847 units. Automobile sales in India are counted as factory dispatches and not retail sales.

Maruti Suzuki India, the nation's largest carmaker, suffered its second consecutive month of sales decline in August as Kerala accounted for about 8% of the company's overall sales. South Korea's Hyundai saw a 2.8% decline in domestic sales in the month as the state contributed 6% to its sales.

Vishnu Mathur, the director general of SIAM, told reporters at a news conference that he expects demand to pick up in October, aided by the onset of several Hindu festivals, when consumers spend on everything from electronics to jewellery to cars.

Mahindra & Mahindra, India's second-largest SUV maker, reported a 14% rise in August sales, while Tata Motors reported a 27% jump.

Domestic sale of trucks and buses, considered a barometer of the economy's health, rose about 30% to 84,668 units in August. Truck demand has received a boost in India with the federal government focusing on building more highways, ports, and airports.

Sales of two-wheelers increased 2.9% in August to about 1.95 million units, the SIAM data showed.

--Asmita Dey and Dhanya Ann Thoppil

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