Don’t underestimate invisible natural phenomena. Take, for example, the recent heatwave in India.
Extreme temperatures, which can reach up to 52 degrees Celsius, have not only resulted in fatalities but also impacted car sales. According to Reuters on Friday (7/5/2024), retail car sales in India declined in June for the second consecutive month.
“The heatwave across the country is deterring customers from making purchases despite massive discounts,” said the Federation of Automobile Dealers Associations of India (FADA).
In its statement, FADA reported that passenger vehicle sales dropped by 6.8% year-on-year in June. This decline was significantly sharper than the 1% decrease in May, according to FADA, which tracks monthly retail sales from dealers to buyers.
This decline in automotive transactions is significant. Car sales are considered a key indicator of private consumption in India. The Indian automotive industry accounts for 7% of the country’s GDP.
The intense heat in northern India has reduced the number of visitors to dealerships and resulted in fewer people buying cars, according to analysts. This has particularly affected small cars and electric vehicles.
“Despite increased product availability and massive discounts aimed at stimulating demand, market sentiment remains sluggish due to the extreme heat, which has led to a 15% decrease in visits. Feedback from dealers highlights challenges such as fewer customer inquiries and postponed purchasing decisions,” said FADA President Manish Raj Singhania.
