The dim outlook for India’s automobile sector is likely to continue well into 2019 as unsold vehicles swelled, while new car registrations saw a decline in the October-December quarter, according to a note by Target Investing.

Dealer inventory during October to December 2018 was at an average 552,616 vehicles per month, doubling from 275,522 in the same period a year earlier, Target said in the report. Registrations for new cars, two-wheelers and three-wheelers declined. Target used registration information collected from regional transport offices in 30 states and territories and data from Society of Indian Automobile Manufacturers, the industry body.

“There is a clear consumer demand slowdown as there is a reduction in registrations across the segments," Sameer Kalra, founder of Target Investing in Mumbai, wrote in the report. Original Equipment Manufacturers or OEMs will cut production for a third month in a row, which will cause a “big worry" for automobile ancillary companies, he wrote.

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