India car sales growth slowest for two years

Indian car sales grew at the slowest pace in two years in May, industry data showed Thursday, as price hikes, rising fuel costs and costlier loans kept buyers out of showrooms.

Passenger car sales in Asia's third-largest economy rose by seven percent to 158,817 units in May from 148,425 units in the same month the previous year, the Society of Indian Automobile Manufacturers (SIAM) said.

The growth was nearly half of the 13 percent year-on-year jump in April and down from the 24 percent growth recorded in March.

Sales of trucks and buses - a key barometer of economic activity - rose 16.16 percent in May from a year earlier to 56,314 units in May, the industry body said.

"This is the slowest growth rate since May 2009, when the increase was just 2.77 percent," SIAM senior director Sugato Sen told reporters.

"The sentiment in the market is not very positive," he added, expressing concerns that the Indian auto sector may fall short of its predicted 12 to 15 percent growth in the current financial year, which ends in March 2012.

SIAM will review data projections next month, Sen said, adding that he expected sales to grow at a slower rate in June.

Domestic car sales grew by 30 percent to 1.98 million units during last year - the most in more than a decade - fuelled by an increasingly affluent middle class, new model launches and cheap loans.

But rising vehicle prices and a series of interest rate hikes by India's central bank to tame inflation have impacted demand for cars, analysts said.

"Monetary policy tightening is taking a toll," said Jagannadham Thunuguntla, head of research at SMC Global Securities in New Delhi.

"We could see modest growth for the rest of the year, as discretionary products are taking a backseat," he told AFP.

Indian auto makers Maruti Suzuki India, Tata Motors and Mahindra and Mahindra have raised prices of vehicles by an average 1-2 percent in the year.

sal/phz/bgs

 

  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs General

    Ashdown Group: IT Project Coordinator (Software Development) - Kingston

    £45000 - £50000 per annum: Ashdown Group: IT Project Coordinator (Software Dev...

    Ashdown Group: Editor-in-chief - Financial Services - City, London

    £60000 - £70000 per annum + benefits : Ashdown Group: A highly successful, glo...

    Ashdown Group: Junior Application Support Analyst - Fluent German Speaker

    £25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...

    Ashdown Group: Accountant - London - £48,000 - 12 month FTC

    £40000 - £48000 per annum + bonus + benefits: Ashdown Group: International Acc...

    Day In a Page

    General Election 2015: Ed Miliband's unlikely journey from hapless geek to heart-throb

    Miliband's unlikely journey from hapless geek to heart-throb

    He was meant to be Labour's biggest handicap - but has become almost an asset
    General Election 2015: A guide to the smaller parties, from the the National Health Action Party to the Church of the Militant Elvis Party

    On the margins

    From Militant Elvis to Women's Equality: a guide to the underdogs standing in the election
    Amr Darrag: Ex-Muslim Brotherhood minister in exile still believes Egypt's military regime can be replaced with 'moderate' Islamic rule

    'This is the battle of young Egypt for the future of our country'

    Ex-Muslim Brotherhood minister Amr Darrag still believes the opposition can rid Egypt of its military regime and replace it with 'moderate' Islamic rule, he tells Robert Fisk
    Why patients must rely less on doctors: Improving our own health is the 'blockbuster drug of the century'

    Why patients must rely less on doctors

    Improving our own health is the 'blockbuster drug of the century'
    Sarah Lucas is the perfect artist to represent Britain at the Venice Biennale

    Flesh in Venice

    Sarah Lucas has filled the British pavilion at the Venice Biennale with slinky cats and casts of her female friends' private parts. It makes you proud to be a woman, says Karen Wright
    11 best anti-ageing day creams

    11 best anti-ageing day creams

    Slow down the ageing process with one of these high-performance, hardworking anti-agers
    Juventus 2 Real Madrid 1: Five things we learnt, including Iker Casillas is past it and Carlos Tevez remains effective

    Juventus vs Real Madrid

    Five things we learnt from the Italian's Champions League first leg win over the Spanish giants
    Ashes 2015: Test series looks a lost cause for England... whoever takes over as ECB director of cricket

    Ashes series looks a lost cause for England...

    Whoever takes over as ECB director of cricket, says Stephen Brenkley
    Fishing for votes with Nigel Farage: The Ukip leader shows how he can work an audience as he casts his line to the disaffected of Grimsby

    Fishing is on Nigel Farage's mind

    Ukip leader casts a line to the disaffected
    Who is bombing whom in the Middle East? It's amazing they don't all hit each other

    Who is bombing whom in the Middle East?

    Robert Fisk untangles the countries and factions
    China's influence on fashion: At the top of the game both creatively and commercially

    China's influence on fashion

    At the top of the game both creatively and commercially
    Lord O’Donnell: Former cabinet secretary on the election and life away from the levers of power

    The man known as GOD has a reputation for getting the job done

    Lord O'Donnell's three principles of rule
    Rainbow shades: It's all bright on the night

    Rainbow shades

    It's all bright on the night
    'It was first time I had ever tasted chocolate. I kept a piece, and when Amsterdam was liberated, I gave it to the first Allied soldier I saw'

    Bread from heaven

    Dutch survivors thank RAF for World War II drop that saved millions
    Britain will be 'run for the wealthy and powerful' if Tories retain power - Labour

    How 'the Axe' helped Labour

    UK will be 'run for the wealthy and powerful' if Tories retain power