Passenger car sales in India increased by 1.6% in the domestic market in June, one of their slowest months since two years, abetted by hike in interest rates and fuel prices, and costs of vehicles decreasing demand in the second fastest increasing auto market in the world. Last fiscal, the autos sales in India grew by as much as 30%.
With interest rates rising almost ten fold since March 2010, the sales of automobiles in India were greatly affected. Sales of India’s top passenger car manufacturer, Maruti Suzuki decreased by 8.8%, selling 80,298 models in June, their first drop in sales since Dec 2008. The production at the company was recently affected by labour protests, incurring a loss of around 16,000 models.
Sales of homegrown manufacturer, Tata Motors also decreased by1%, with sales of their cheap car Nano, falling by as much as 29%. Indian auto manufacturers managed to sell around 1,43,370 models in June, which was their slowest sales pace from two years ago in March, according to the data compiled by SIAM or Society of Indian Auto Manufacturers.
However, sales of buses and trucks, one of the key factors of a healthy economy increased by 17.8% selling around 62,009 models in June. Earlier in the year, SIAM had said that they expected the sales growth of cars to decrease by 16% in this fiscal year, a sharp decrease from last fiscals 30% growth.