Slowing car sales raises concerns among Indian auto makers

Monday 19 September 2011, 11:01 AM by Vikas Yogi

The ongoing slowdown in the Indian car industry has made the car makers rethink over their capacity expansion plans in the country. Exited with the high demand momentum of last year, a number of car makers had expanded their manufacturing capacity, in order to catch-up with the rising demand for cars. On the contrary, a steep dip in the overall industry sales for two consecutive months in July and August has now raised the concerns among the auto makers in the country.

The segment that has been the most affected by this slowdown is the passenger car segment, with leading car makers like Maruti Suzuki, Hyundai and Tata Motors witnessing a slowdown in sales. The total sales in the passenger car segment in August 2011 stood at mere 234,093 units as compared to 246,146 units sold in the same month last year.

Struggling with the slowdown, the car makers were expecting some revival in car sales during the festive season coming ahead. But now as the industry body SIAM (Society of Indian Automobile Manufacturers) has lowered its growth projections in the coming months, the car makers are not expecting much from the months coming ahead. Adding to it, are the recent hikes in borrowing rates and petrol prices, both of which are expected to further dent the car sales in India.

However, still being optimistic, a number of car makers have planned-up to launch their new cars in this season. This includes Nissan Sunny, Honda Brio, Mahindra XUV 500, Skoda Lauretta and many more.

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