India’s passenger car sales slid by 24% in the festive month of October, the worst ever in a month over a decade as customers stayed away from showrooms burdened by high interest rates and rising fuel price.
With two major festivals coinciding in the same month, October was expected to bring the industry back on track but it has only got worse. Car sales stood at 138,521 units against 181,704 units in October 2010. The growth during the same month last year was a massive 38%. Sales have now declined for four consecutive months this year and with November and December being traditionally sluggish months for car sales, a return to the growth story remains unlikely.Market leader Maruti Suzuki’s protracted labour problem at one of its plants also played a role in the industry’s poor performance. Maruti produced 40,000 cars less in October.
“This is the worst ever sales performance in a month after December 2000 when sales had slid by almost 40%,” said Vishnu Mathur, director general, Society of Indian Automobile Manufacturers (SIAM). “High interest rates, fuel costs and Maruti’s labour problems, all played a part in this.”
The gloom is spreading to other sectors as well. Two wheelers grew by a mere 2%, its lowest growth rate in a month this fiscal.