Tata Braces For Sharp Sales Drop in India

India’s Tata Motors Ltd. has warned suppliers that its domestic passenger and commercial vehicle operations each may see sales drop by double digits through next spring.

Sources tell The Economic Times that Tata blames the rising costs of ownership for slumping demand for new cars. They says Tata slumping commercial truck activities reflect the impact of India’s economic slowdown and a government policy that allows commercial operators to carry heavier loads.

Like many other carmakers around the world, Tata anticipates a sales uptick late this year and into next spring—but not enough to fully restore volumes, one source says.

Tata delivered strong results in the fiscal year ended March 31. But sales have fallen sharply since then. The company says its wholesales in April-July dropped more than 30% for cars and about 20% for commercial vehicles.

Over the same period, India’s overall wholesale markets for cars and commercial vehicles shrank 18% and 10%, respectively, ET reports.