India's automobile sales fall for 13th straight month - industry body

Cars are seen parked at Maruti Suzuki's plant at Manesar

NEW DELHI (Reuters) - India's domestic passenger vehicle sales fell in November for a 13th consecutive month with no sign of an immediate recovery, an auto industry body said on Tuesday.

Sales of passenger vehicles declined 0.84% to 263,773, compared with 266,000 in the year-earlier period, figures released by the Society of Indian Automobile Manufacturers (SIAM) showed.

The rate of decline was the slowest in recent months - driven largely by a preference for utility vehicles.

But sales of two wheelers - widely seen as an indicator of rural economic health - and commercial vehicles fell nearly 15% each.

Industry officials attributed lower sales to structural issues impacting India's rural economy. The current slowdown has been longer than those experienced in 2013/14 and 2007/08, and it is the first time sales across all segments have declined, they said.

"We would like to believe that it [low two wheeler sales due to slowing rural consumption] is a structural economic issue," Rajesh Menon, the Director General of SIAM, told reporters on Tuesday.

India's economic growth slowed to 4.5% in the three months to September 30 - the weakest pace in more than six years - government data released last month showed, as consumer demand and private investment weakened.

The crisis in the auto sector presents a major problem for Prime Minister Narendra Modi's government. The sector accounts for nearly half of India's manufacturing output and employs over 35 million people directly and indirectly.

Reuters reported earlier this year that companies in the sector - which includes manufacturers, auto parts makers and dealerships - had cut as many as 350,000 jobs during the first half of the year.

SIAM said passenger vehicle production rose 4.06% to 263,773 in November, as Maruti Suzuki <MRTI.NS>, the country's biggest carmaker by revenue, ramped up its output of cars. Maruti has a market share of close to 50% in the segment.

The government has tried to implement a series of measures to improve the financial health of the sector, including encouraging state-run banks to lend to potential car buyers and dealers.

SIAM's Deputy Director General Sugato Sen said levels of financing being made available to customers has improved, but dealers were still facing challenges.


(Reporting by Sudarshan Varadhan in New Delhi; editing by Sherry Jacob-Phillips and Mike Harrison)