The Indian automobile industry has witnessed a sharp drop of 23.8 percent in car sales during the month of October 2011. This was the biggest ever monthly decline in car sales in the country in last one decade. The continuously rising fuel costs and high interest rates on car loans remained the major contributor in slowing down the sales. Moreover, a two week long strike at country’s largest car maker Maruti Suzuki further kept the sales figures at low levels. This is the fourth consecutive month when sales of cars in India have declined. Car sales dipped 15.8% in July, 10.1% in August and 1.8% in September.
Speaking on the performance of the automobile industry, Vishnu Mathur, director-general of the SIAM (Society of Indian Automobile Manufacturers), said, "The auto industry is facing the double whammy of high interest rates and rising fuel prices. For any recovery to happen interest rates have to come down and fuel prices need to cool." He added that demand for petrol cars has been hit hard. Though customers are keen to purchase diesel cars, production is a major constraint.
As per the data released by SIAM, the total car sales in India stood at 138,521 units last month as compared to 1,81,704 units sold in October 2010.
Maruti Suzuki registered biggest losses during the month with losing production of 50,487 cars last month due to worker’s strike at its Manesar Plant.
Speaking on the auto industry’s performance, Arvind Saxena, director (Marketing and Sales) at Hyundai Motors India Limited, said "Traditionally sales get a boost in the festival season, but this year the general weak customer sentiment played spoilsport with the market. We don't expect any major upswing in the near future as uncertain macroeconomic environment will continue to affect the industry."
