SBI extends credit period of stressed auto dealers by nearly 30 days

“As a bank, we can only focus on the financing side. Our main focus is to make available funds at cheaper cost for those retail customers keen on buying cars. We also fund the dealers when they buy cars from the manufacturer. However, for the aspect of the revival of demand, only the government can step in," he said.

Gupta further said there has been a slight downturn in auto loans from the bank in recent months due to various reasons.

The auto sector is facing its worst crisis in two decades and reports suggest thousands of job losses in the automobile and ancillary industry.

Around two lakh jobs have been cut across automobile dealerships in India in the last three months as vehicle retailers take the last resort of cutting manpower to tide over the impact of the unprecedented sales slump, according to the Federation of Automobile Dealers Associations (FADA).

As per Society of Indian Automobile Manufacturers (SIAM) figures, vehicle wholesale across all categories declined by 12.35 percent to 60,85,406 units in April-June against 69,42,742 units in the same period of last year.

On the other hand, as per data based on registrations collated by FADA, automobile retail sales in the April-June period declined by 6 percent to 51,16,718 units in the first quarter of this fiscal as against 54,42,317 units in the year-ago period.

Passenger vehicles (PV) segment has been the worst hit with sales continuing to decline for almost a year now. In July, market leader Maruti Suzuki reported a 36.3 percent drop in its domestic PV wholesales, while Hyundai saw a dip of 10 percent.