Automakers’ sales to dealers dropped in July, August and September for an aggregate 1.8% year-on-year decline to around 1.06 million in the second quarter, data from the Society of Indian Automobile Manufacturers showed.

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The sales growth had already slowed from a 4.7% rise in year-ago second quarter to 3% in the April-to-June quarter.

The drop in automakers’ sales in the latest quarter compares to an even steeper 4.5% decline in dealers’ sales to consumers in the same period, per data from the Federation of Automobile Dealers Associations (FADA).

Increase in sales of utility vehicles

Among segments, the increase in sales of utility vehicles, including sports utility vehicles (SUVs), slowed sharply to 9% in the quarter from 23.5% in the year-ago period.

Automakers and dealers have blamed the declines on heavier-than-usual rains in June and July. Meanwhile, the pre-festive season period, an inauspicious time for big-ticket purchases fell entirely in September this year vs October last year.

"Heavy rainfall in key states ... did impact the sales numbers of some of the segments," said Shailesh Chandra, SIAM’s president.

SUV sales have powered the industry for three years and account for roughly two-thirds of total sales. That has helped the likes of Mahindra & Mahindra (MAHM.NS), opens new tab and Toyota (7203.T), opens new tab.

Slowdown in SUV sales compounded by 20% slide

The slowdown in SUV sales was compounded by a nearly 20% slide in sales of small cars, continuing their decline and hurting market leader Maruti Suzuki (MRTI.NS), opens new tab as well as Tata Motors (TAMO.NS), opens new tab and the soon-to-be listed Hyundai India HYUN.NS.

Chandra, however, expects sales growth to return in the October-to-December quarter, helped by festive season demand through almost the entire period.