Amid a decline in car sales for two consecutive months, the Society of Indian Automobile Manufacturers (SIAM) on Wednesday lowered its full-year growth forecast to 1-3% from 9-11% announced in July.
Auto sales fell by 9.4% in September, the steepest fall since December 2008.
Car sales dropped 5.4% during the month to 157,536 units in September compared to 166,464 units in the year-ago period.
“This trend is likely to continue until the economy comes back on track,” said S Sandilya, president, SIAM.
Reflecting subdued consumer sentiments, motorcycle sales slumped 18.9%, forcing SIAM to lower growth estimate for the segment to 5-7% from 11-13%.
Commercial vehicle sales were flat, although medium and heavy truck segment continued to show decline due to slow industrial activity.
Commercial vehicle sales are estimated to grow 3-5%, down from 6-8%. Three-wheeler sales were also flat while automobile exports contracted 5.96%.
According to analysts, not just economic factors, but growing customer preference for utility vehicles has led to the drop in car sales.
Utility vehicles has had a good run so far this year with 55% growth.
RC Bhargava, chairman, Maruti Suzuki, said car sales will pick up. “There will be 5% growth in the second half. The sentiment will improve because of reform measures,” he said.