Rising interest rates and car prices along with high cost of fuel stunted growth in sale of cars last month to its slowest pace in 22 months.
Car sales in India grew by 13.2% in April over the same month last year to 162,825 units, putting a stop to a run of three consecutive monthly highs. Overall sale of vehicles still managed a higher tempo growing by almost 23% during the month as sale of two wheelers that account for over 70% of the market, grew by 26.4% during the month.
“We are anticipating that there will be some postponement of purchases because of interest rates and high prices,” said Sugato Sen, senior director, Society of Indian Automobile Manufacturers. “All economic parameters are wobbly and there is no certainty how long the buoyancy in consumer demand witnessed earlier this year, would last.”Sales of trucks and buses, a key pointer to economic activity, rose 8.2% from a year earlier to 53,202 units in April, also the slowest rise since September 2009.
Last week, the central bank Reserve Bank of India (RBI) raised interest rates by 50 basis points while rising cost of commodities like steel, rubber and other raw materials have forced car makers to raise prices in recent months.