Thursday, November 10, 2011
By Pranjal Gera
October Auto Sales Declined, Steep Fall for Indian Auto Market
After a period of ten years, the Indian auto sales for the October month declined by a steep fall of 23.8 per cent. It’s the decade’s worst shrink ever confronted since December 2000, as declared by industry sources.
The domestic market has experienced this disastrous downfall due to climbing interest rates and hike in petrol prices. All this have forced the customers to freeze their car buying plans as finance costs and petrol prices are severely hitting the country, making the automobile manufacturers confront sinking sales.
Director General of the Society of Indian Automobile Manufacturers (SIAM), Mr. Vishnu Mathur shared his views and stated that people who have taken a loan to buy a car already have a home loan. A rise in interest rates will further discourage them to invest in another auto loan.
The middle class section of the country is the major segment that buy car on loan and heavily relies on banks and financial institutes but now the hike in interest rates has bound the common man’s dream. Last month’s increase in interest rates by the Reserve Bank of India is the thirteenth raise since March 2010.
According to SIAM facts only 138,521 cars were sold last month in October and the petrol car sales was badly bumped.
With plunging petrol car sales, Mr. Mathur expressed that there is hardly any demand for petrol cars today while the demand for diesel cars is going up, but there is not so much capacity in the country. Even the festive season was unable to gain growth in sales in spite of so many offers, discounts and freebies.
The leading passenger carmaker of the country, Maruti Suzuki mentioned last week that the company sold less than half the units in October as compared to last year because of labor unrest at its manufacturing plant based at Manesar, Haryana.