India Dispatch: India's stalling car sales are expected to plunge to their weakest growth levels in nine years.
India car sales growth to stall again
India's stalling car sales are expected to plunge to their weakest growth levels in nine years.
The Society of Indian Automobile Manufacturers (Siam) has slashed its growth forecasts for the financial year from April to this March to between zero and 1 per cent. This is the third time the industry body has reduced its growth projection for the year.
It cited India's high interest rates, slowing economy, and rising fuel prices as the factors behind the downgrade.
"With the current economic outlook, the industry needs to grow at a pace much faster than what is expected," said S Sandilya, the president of Siam.
"Going by the current trends, we do not think the industry will be able to recover in the fourth quarter unless government provides full support."
He urged the central bank to cut interest rates which have remained on hold in recent months amid stubbornly high inflation. India's economic growth slowed to 5.3 per cent in the quarter between July and September.
Figures from Siam show that car sales last month fell by 12.5 per cent from the same month a year earlier. Car sales between April and December are down 0.33 per cent compared with the same months during the previous year.
Overall automobile sales are expected to grow by 3 to 5 per cent in the year to March, said Siam.