According to foreign media reports, due to the weakest monsoon in the past five years, rural consumers in India experienced a reduction in their income, severely affecting the sales of small cars in the country, leading to a dramatic year-on-year decline.
Data released by the Society of Indian Automobile Manufacturers (SIAM) shows that in the second fiscal quarter ending in September, sales of entry-level cars fell by 75% compared to the same period last year, dropping to 35,000 units. Motorcycles and scooters have become the most popular modes of transportation in rural areas due to their low cost, yet their sales have also declined by 39% and 25% respectively.
Farmers' wage levels remain stagnant after a ban on wheat and rice exports hurt rural income. Rainfall from June to September in India was also below average, and with half of India's farmlands relying on rainfall for irrigation, the decreased rainfall posed a serious threat to crop yields, further exacerbating the pressure on rural income.
On October 16, SIAM Chairman Vinod Aggarwal commented that the rural income levels are now lower than before. He stated, "Due to regulatory changes, the prices of entry-level cars have increased. As the gap between car prices and rural consumer income grows, the demand for entry-level cars has decreased."
However, as the small car market shrinks, the demand for large sport utility vehicles (SUVs) from the Indian middle class is continuously growing. From July to September this year, domestic SUV sales in India increased by 23% year-on-year, reaching 639,552 units.
In September this year, India's passenger car sales reached 361,717 units, compared to 359,228 units sold in August.
In terms of exports, Indian car exports increased by 3.34% year-on-year in September, reaching 391,717 units. However, during the second fiscal quarter, the country's car exports fell by 6.02% year-on-year, to 1.18 million units.
