Car sales in India, one of the fastest growing markets saw sales growth for the month of May at lower pace in the last seven months. Car sales were hit by raising petrol prices and high interest rates which may make a revision in the targeted sales growth of 10-12% for the year.
Car sales in the country stood at 1,63,229 units in May against 1,58,809 units during the same period last year, said a report by the Society of Indian Automobile Manufacturers (SIAM). SIAM director general Vishnu Mathur said: "This is the slowest growth since October last year when car sales witnessed a 24% decline."
The market had registered car sales at 1,68,351 units in April 2012, recording a slight growth of 3.4% against the sales during the same month in 2011. The SIAM director added: "Demand for passenger cars may move into negative territory because the overall market sentiment is very negative. Moreover, the increased in petrol prices have also affected sales last month."
Petrol prices had seen a hike of Rs 7.50, the steepest ever hike in the country affecting petrol car sales miserably. Meanwhile, major carmakers like Maruti Suzuki, Hyundai Motors and General Motors are offering huge discounts to attract customers to their petrol cars. The market leader, Maruti Suzuki has even reduced petrol car production due to downfall in sales.