Second year of falling car sales for India, can launches save the day?

Car sales in India have fallen 4.7 percent in the first six months of the fiscal year, the sharpest decline in half-year sales since 2002-2003, according to figures released by the Society of Indian Automobile Manufacturers (SIAM).

Despite a slight 0.7 percent uptick in sales in September when automakers sold 156,018 cars, the industry is facing a second consecutive year of falling demand as high interest rates and fuel costs keep a lid on consumer spending in a slowing economy.

A surprise increase in interest rates and higher prices last month are tempering hopes for a turnaround in the country’s struggling auto sector and some analysts have pushed back forecasts for a sustained recovery to the next financial year.

More from Business

Hyundai India’s Rs 27,870 crore IPO oversubscribed by 2.28X, largely driven by institutional investors How Indian fintech startups are driving Malaysia’s UPI-like digital payments revolution

[caption id=“attachment_1026339” align=“alignleft” width=“380”]  Automakers are hoping for a slight recovery in demand thanks to a strong monsoon which should raise incomes, while some car launches, including that of Ford Motor Co’s EcoSport compact sport-utility vehicle, are seeing strong sales.[/caption]

“Whether we’ll catch up…it’s a tough call,” said Vikram Kirloskar, president of the Society of Indian Automobile Manufacturers (SIAM). “I’ll be thrilled if it is flat or a little bit plus.”

Automakers are hoping for a slight recovery in demand thanks to a strong monsoon which should raise incomes, while some car launches, including that of Ford Motor Co’s EcoSport compact sport-utility vehicle, are seeing strong sales.

Impact Shorts

More Shorts

Chennai Ranks #1 in Challan Checks: ACKO Insights for Smarter Car and Two Wheeler Insurance Decisions

Tata Harrier EV vs Mahindra XEV 9e: Design and road presence compared

Sales of motorcycles rose 17.4 percent in September to 885,117, while truck and bus sales were down 27 percent at 51,680 units, SIAM said. Sales of commercial vehicles have been particularly hit hard as industrial production and economic activity slows.

The association last month said car sales were likely to be negative in the current financial year that ends in March 2014 after earlier forecasting growth of 3-5 percent.

Reuters