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Wednesday, August 17, 2022

Car sales seen falling this financial year: industry body

(Reuters) – Car sales in India are expected to fall in the current financial year that ends in March, an industry body said, marking a second straight year of decline, as high interest rates and a slowing economy force consumers to delay purchases.

Automakers sold 163,199 cars in India last month, a drop of 3.9 percent from a year earlier, data from the Society of Indian Automobile Manufacturers (SIAM) showed.

SIAM had estimated in April that car sales would grow by 3-5 percent this year, but has indicated in recent months that they may fall instead.

Car sales had declined continuously in the first nine months of the year, said Vishnu Mathur, director general at SIAM.

“Now the decline is moderating, so if it keeps on moderating at this pace maybe we’ll see zero growth in January-February,” said Mathur.

“Definitely the year will be negative,” he added

Sales of motorcycles rose 18.1 percent in October to a record 1.1 million, helped by festive season demand and strong sales in rural regions, where incomes were boosted by good monsoon rains.

The September to December months, marked by a number of festivals, are considered by many Indians to be an auspicious period to make big-ticket purchases.

Truck and bus sales were down 19.8 percent at 53,533 units, SIAM said.

Meagre urban salary hikes in an economy growing at its slowest pace in a decade, combined with high interest rates and fuel costs has dimmed the near-term outlook for the Indian auto industry. Some analysts have pushed back forecasts for a sustained recovery to the next financial year.

(Reporting by Matthias Williams; Writing by Aradhana Aravindan; Editing by Anand Basu)

Source: Reuters

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