The Indian automobile industry, that had been growing considerably well until recently, has now started showing signs of slowdown. The auto biggies in the country, who had been registering whopping sales figures since last one and a half year, are now witnessing a sudden dip in their sales as the hike in car loan interest rate and rising fuel costs keep the car buyers away from showrooms.
In the month of May 2011, the car sales in the country surged a mere 5 percent as compared to the staggering 35 percent growth registered a year ago. The top three car makers in the country – Maruti, Hyundai and Tata – registered a lower growth figures as compared to the previous year. Gripped in the slow down, almost every major car maker saw a fall in the growth rate during May, indicating the changing scenario of the Indian car market.
Maruti Suzuki India Ltd., the largest car maker in the country, reported a moderate sales growth of about 4 percent, a steep fall from last year’s 27 percent growth.
The largest vehicle maker in the country – Tata Motors suffered the most with a 9% fall in the sales during the month. The sales of company’s most popular small car Tata Nano dipped to 6,515 units from over 10,000 units sold in the last month.
The largest car exporter Hyundai India, however, performed comparatively well with over 14 percent growth in sales during the month as against 15.5% jump registered in the same month last year.
According to a recent statement given by managing executive officer (sales and marketing) at Maruti Suzuki India Ltd., “Hike in prices of fuel often have a temporary shock value but the impact of higher interest rates is more prolonged.” He added that over a quarter of car buyers already have an existing home loan and are hence stretched.
According to industry experts, the car industry is expected to be gripped in a slow-down for at least next three months.
