Car sales in India have slowed sharply this year amid challenging economic conditions in the country. Thousands of jobs are being lost as dealerships close down and carmakers slow production. Our correspondent Rebecca Bundhun reports from Mumbai.

Deepak Temkar, a car dealer in Mumbai, is worried he will soon go out of business. Two years ago he was selling about 25 used cars each month. Now he says his sales have halved.

DEEPAK TEMKAR, PARTNER SHREE SAI AUTO AGENCY "We can't survive in this scenario, so it's very tough to survive if things are going in the same direction."

Mr. Temkar is not alone. The car industry in India is seeing its worst slump in two decades.

REBECA BUNDHUN MUMBAI "New car sales fell 36 percent to just under 123,000 vehicles in July compared to the same month a year ago, according to the Society of Indian Automobile Manufacturers. This was the ninth consecutive month that sales declined."

Economists point to the country's economic slowdown combined with non-banking lenders giving out fewer car loans. One report, from Reuters, estimates 350,000 jobs have been lost since April, as dealerships close down and factories shut temporarily.

JAY KALE, VICE PRESIDENT AUTO SECTOR EQUITY ANALYST, ELARA CAPITAL "It's a pretty grim situation in terms of the job losses pertaining to the auto sector. Unless immediate steps are taken we could have a tough time coming ahead in the next three to six months. The auto sector is pretty big in terms of manufacturing GDP. It contributes to around 49 percent of manufacturing GDP and overall around 7, 7.5 percent of GDP, so it's quite a big employment generator."

But some believe there are other factors driving down demand for cars – including Uber and its homegrown rival, Ola, which are both widely used in India's major cities.

FAIKA MUMBAI RESIDENT "I don't need to buy a car, like say, for example, I do not travel much on roads, I take local trains, and I take rickshaws, Ubers, and Olas."

DHANESH MUMBAI RESIDENT "Mumbai is already a very crowded place, so buying a new car makes it more difficult because there is a parking problem."

To spur demand, the industry is asking the government to reduce the tax rate on cars from 28 percent to 18 per cent. Indian prime minister Narendra Modi in a recent interview with The Economic Times newspaper described the slowdown in the car sector as "transient" and said he believed "demand and the industry will bounce back strongly and soon". But Mr. Temkar is not too hopeful. With competition from online car dealers also hurting his business, he says it's going to be tough to jumpstart sales. Rebecca Bundhun, CGTN, Mumbai.