Car sales register 6.7% growth in July; the slowest in nine months

Car sales in India witnessed a slow growth of 6.7% in July at 1.43 lakh units, the slowest in nine months and less than the industry estimates, as high interest rates and increase in excise tax weakened the demand. During April-July 2012, overall automobile exports registered a negative growth at 4.03% and passenger vehicles and commercial vehicles both grew by 9.14% as per the data released by the Society of Indian Automobile Manufacturers (SIAM).

Further, the lock-out at Maruti Suzuki’s Manesar plant, country’s largest car maker has deeply affected the sales, though its domestic sales in July stood at 71,024 units compared to 66,504 units in July last year, up 6.80%. However, with no production since July 19, it is likely to affect the entire car sector in the approaching month. Moreover, interest rates at 12-15% range, surging petrol prices and the difference between petrol and diesel prices remaining high, volume growth is likely to slow down in coming months.

SIAM’s director general Vishnu Mathur hopes newly appointed Finance Minister, P Chindambaram would provide a solution to boost up the sales especially around the upcoming festival season along with some measures on the petrol and diesel price front.