Passenger vehicle sales in the country declined for the third month in a row in January, falling 1.87 per cent, as manufacturers continued to cut inventory at dealers following tepid festive season sales.

According to data released by the Society of Indian Automobile Manufacturers (SIAM), passenger vehicle (PV) sales in January stood at 2,80,125 units against 2,85,467 units in the same month last year.

Domestic car sales were also down for the third consecutive month, declining 2.65 per cent to 1,79,389 units compared with 1,84,264 units in January 2018.

“Stock correction by manufacturers continued in January and they cut inventory that were piled up during the festive period, which saw sluggish sales,” SIAM deputy director general Sugato Sen said.

Sen, however, said retail sales were better than the wholesale segment in January, and the industry expects demand to grow in the remaining two months of the fiscal.

Analysts expect sales to get a boost as loans could turn cheaper following the Reserve Bank of India’s decision to cut the repo rate by 25 basis points on Thursday.

During the month, market leader Maruti Suzuki India (MSI) posted a marginal growth of 0.18 per cent in its PV sales at 1,39,440 units. Rival Hyundai Motor India Ltd (HMIL) also posted a 0.65 per cent growth at 45,803 units. Similarly, homegrown utility vehicles major Mahindra & Mahindra saw a 0.88 per cent rise in its PV sales at 23,864 units last month.

In the car segment, MSI's sales stood at 1,01,865 units, down 4.12 per cent. HMIL's car sales were also down 1.58 per cent at 35,439 units last month. Honda Cars India, however, saw its car sales grow 51.67 per cent to 14,383 units.

The muted response by consumers has resulted in car makers continuing with discounts to clear their stocks.

“Discounts on cars are quite high this fiscal. It is not a good picture. Inventories are higher and companies want to clear the stock,” Nikunj Sanghi, director (international affairs) of the Federation of Automotive Dealers Associations, said.