Car sales slump; biggest drop in 10 months

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SME Times News Bureau | 10 Sep, 2012
Higher fuel prices and interest rates and a slowdown in the economy saw car sales plummeting more than 18 percent in August, the biggest drop in 10 months, the Society of Indian Automobile Manufacturers (SIAM) said Monday.

According to SIAM data, car manufacturers sold only 118,142 units last month which was 18.6 percent lower than the figure logged a year ago.

SIAM said the negative buyer sentiment may continue for a longer period if the high fuel prices and interest rates do not come down.

"The external trends have had a very negative impact on sales. If these factors do not change then the current sentiment will continue," Sugato Sen, senior director said.

Earlier, SIAM had brought down its sales forecast from 12-15 to 9-11 percent. If the August sales trend continues then it may have to further downgrade its annual sales forecast.

"We will carry out a formal exercise to determine the rates in October," Sen added.

Passenger car market leader Maruti Suzuki logged 40 percent lower sales in August as compared to the offtake during the corresponding month of 2011. The automobile maker was hit by labour unrest last month. The company was only able to sell 54,415 units last month as against 91,442 units sold in August 2011.

The automobile major's performance was also affected due to a lock out at the Manesar plant (July 21 to Aug 20, 2012), the supply of Swift, Dzire, SX4 and A-star models was impacted, the company said.