BENGALURU, July 5 Reuters Retail sales of cars in India fell in June for the second straight month as heatwaves across the country deterred customers from purchases despite substantial discounts, a dealers39; body said on Friday.

Passenger vehicle sales fell 6.8 yearonyear in June, a steeper drop than the 1 decline in May, according to data from the Federation of Automobile Dealers Association FADA, which tracks monthly retail sales from dealers to buyers.

WHY IT39;S IMPORTANT

Auto sales are seen as a key indicator of private consumption in India. India39;s auto industry forms 7 of the country39;s GDP, as per government data.

CONTEXT

The intense heat in northern India has reduced footfall at dealerships and led to fewer people buying cars, according to analysts.

This especially hurt small cars and electric vehicles.

Subdued retail demand also led to muted wholesales for some carmakers, according to analysts. Tata Motors attributed the drop to the impact of the Indian elections, in addition to the weather.

Mahindra Mahindra also posted weakerthanexpected overall June wholesale growth.

Analysts said concerns around how the government39;s policies could affect peoples39; income might discourage consumers from buying vehicles and hurt automakers39; sales to dealerships.

Still, the SUV portfolios of companies, including Maruti Suzuki, benefitted from strong demand, extending the recordhigh sales seen in the financial year 2024.

KEY QUOTES

Despite improved product…