India’s slowing economic growth and continuing high rates of interest on auto loans dragged car sales in the country further down in January, according to the Society of Indian Automobile Manufacturers (Siam).
Figures released by industry lobby Siam showed that car sales declined 12.45 per cent or by 173,000 units in January year-on-year. In December and November last year, the sales had slipped 12.51 per cent and 8.25 per cent, respectively.
Last month (January 2013), the industry body cut its forecast of passenger car sales for the current fiscal year to from 10-12 per cent to 0-1 per cent.
The industry body now warned that sales might shrink further given current market conditions and declined consumer sentiment.
While talking on topic, Siam Director General Vishnu Mathur, stated, “Consumer response has descended in a statistically significant system. A lot more requires to be done to bring down rates of interest. So, looking at the existing situation, we will not be capable of meeting up even this approximation.”
Mr. Mathur also warned that investments would also be impacted if the ongoing trends continued and the economic conditions did not improve.
In January, India’s top three car makers, viz. Maruti Suzuki India, Hyundai Motor India, and Tata Motors, struggled hard to see an increase in sales. Maruti Suzuki India reported a marginal increase to 88,557 units from 88,377 units in January.
Tata Motors’ sales crashed by 60.76 per cent to 11,192 units from 28,529 units; Hyundai Motor India’s sales increased merely 1.45 per cent to 34,247 units, from 33,756 units in the corresponding month of last year.
SIAM Director General Mr. Vishnu Mathur stated, “The system car sales are at the present time, we may not be capable of meeting up the estimate of 0-1 per cent expansion for the domestic passenger vehicles we made in the month of January 2013. It will be in the pessimistic territory this fiscal.”
Investment funds will also be impacted if the movement proceeds, Mathur said. “Thus far, we have witnessed investments getting reassigned, but we may shortly witness retardation in investments if the financial states do not get better,” Mr. Vishnu Mathur added up.