NEW DELHI: India's car sales slid more than eight per cent in November from a year earlier, industry data showed yesterday, underscoring the overall slowdown gripping Asia's third-largest economy.
The country had been one of the world's fastest-growing car markets in recent years and global auto makers raced to set up factories to supply local demand.
But purchases have slowed sharply as consumers grow wary of committing to big-ticket items owing to the economic downturn, expensive loans and high fuel costs. "There is overall gloom in the market. This slide in numbers is reflecting the economic slowdown and high purchase financing costs," Sugato Sen, senior director of India's Society of Automobile Manufacturers (SIAM), said.
Domestic car sales fell 8.25 per cent to 158,257 units in November, SIAM figures show.
Two months ago, the industry group slashed its car sales growth forecast for the financial year to March 2013 to between one and three percent from an earlier 10-12 per cent forecast.
"We are at 1.28 per cent growth so far" for the fiscal year to November, Sen said. That compares to a stellar 2010-2011 when sales grew 31 percent year-on-year. November's fall in sales was a reversal from October when car purchases rose 23 per cent.
, the fastest in nearly two years, driven by greater demand during India's festival season when it is considered an auspicious time to buy.
But SIAM had warned then that the real test of the sector's health — regarded as an important barometer of wider economic performance — would come once the festival season was over.
Commercial vehicle sales, another key pointer to economic vigour, tumbled 7.3 per cent to 61,410 in November.
India's economic growth eased to 5.3 per cent year-on-year in the July-September quarter, extending a prolonged downturn, while interest rates remain elevated as the central bank seeks to tame stubbornly high inflation.