Although Car sales in India increased 1.6% in June but it is the slowest pace of growth in more than two years. The drop happens due to rising interest rates, fuel prices and vehicle costs shrunk demand in the world’s second-fastest growing auto market.
Indian automakers sold 143,370 cars in June, their slowest pace since March 2009, according the Society of Indian Automobile Manufacturers (SIAM). Sales of trucks and buses however, a key barometer of economic health, rose 17.8% to 62,009 vehicles in June.
India’s central bank has raised interest rates ten times since March last year in an effort to battle stubbornly high inflation, a move that has forced consumers to tighten their purse strings. Therefore middle class car buyers not opting to come forward and claim bank loans for car purchase.
Kishor Ostwal, chairman at brokerage CNI told media,”This was expected. Rising interest rates and inflation are contributing to slowing sales. Also, ahead of the monsoons, demand for cars typically slows down.”
Top car seller of the country, Maruti Suzuki India’s sale fell 8.8% to 80,298 vehicles in June, marking the first decrease since December 2008. Production of Maruti also was hurt by a strike last month that led to a production loss of about 16,000 cars.
Tata Motors, India’s largest maker of trucks and buses and the manufacturer of the world’s cheapest car Nano also noted 1% fell down in sales.
Tags: autocar india
