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Car Sales Dip To Lowest Levels In October: SIAM
The carmakers were preparing for a slowdown but this sales decline is more of a collapse considering sales fell during the festive season, a time of the year when normally sales increase considerably. All carmakers are blaming the increased fuel prices and bank interest rates for the drop in sales.
Fuel prices have been revised more than 11 times in the past one year and the RBI has also increased lending rates at least six times. This has had a huge impact on the spending ability of the consumers. This has adversely affected car sales.
Maruti Suzuki, India's leading carmaker has seen its sales fall steeply I the past few months. Much of this decline has been caused by the declining sales of its petrol powered small cars. The price disparity between petrol and diesel has increased demand for diesel cars and has also lead to the sharp fall of petrol cars.
The SIAM also said people were not taking car loans as they already had home loans to repay. The car is the second biggest investment for many households and high interest rates have made then unaffordable. Carmakers have sold 1,38,521 cars in October 2011. The Diwali festive season did not deliver expected results. Although some new models received more bookings, they lead to reduced bookings of old models.
The India car market which was unaffected by global cues when other markets started to slow down was once considered the fastest growing market. However , tables appears to have turned finally with sales declining. The SIAM has reduced its forecast for this fiscal year's sales.
While car sales report steep falls, sales of commercial vehicles, a key indicator of the country's economic activity , rose 18.5 per cent to 61,800, SIAM said. Sales of motorcycles, used as a family vehicle by millions of Indians, rose 0.7 per cent to 879,883 vehicles.
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