The Indian automobile industry, which has been growing at its best ever rate since last few years, has witnessed a two year slowest monthly growth of 7 percent in the month of May. The factors that contributed to slowing down the growth rate include higher fuel prices, increased vehicle costs and high interest rates. The industry had earlier witnessed a growth of 30 percent in May 2010.
The automakers in the Indian market managed to sell 1,58,817 cars in the month of May as compared to 1,48,425 vehicles sold in the same month a year ago, as per the data issued by the Society of Indian Automobile Manufacturers (SIAM) on Thursday.
Before this, the industry had seen its previous lowest monthly growth in May 2009 at a mere 2.77 percent. Speaking to reporters, Sugato Sen, senior director at the SIAM, said, "If you look at the numbers now, it looks like (reaching fiscal 2012 targets) will be difficult." He added that interest rates are going up, availability of financing is down, prices are rising and sentiment is not very positive among customers. All these factors put together are impacting final sales.
The country’s largest car maker Maruti Suzuki posted its slowest growth during the month at 1.9 percent to 104,073 units.
