India's car market is enduring its worst sales decline in history after sales in April fell for a sixth straight month, according to an industry body, as economic gloom and rising ownership costs savage a once much-vaunted growth market.
High interest rates, rising fuel costs and the dark clouds hanging over India's economy have all slashed demand for cars in a market where ownership levels lag Asian rival China and global automakers have made big bets with hopes of booming growth.
"The economy is not doing well ... giving negative signals to consumers," said Sugato Sen, senior director at the Society of Indian Automobile Manufacturers (SIAM), which compiles the sales data. "Car purchase is always a discretionary purchase, I can always postpone it. That is what is happening."
Car sales fell an annual 10.4% in April, according to SIAM data, marking the first time sales have fallen for six consecutive months since data was first compiled in 1997.
Sales fell 7% in the financial year that ended in March, the first annual fall for a decade, hurting global carmakers such as Ford and General Motors that have invested billions of dollars in a market that expanded by 30% just two years ago.
Positive growth is only expected after three to four months, Sen told reporters, as finance costs slowly come down. Over 80% of car sales in India are financed using credit.
SIAM has estimated car sales to grow by 3-5% in the current financial year that ends in March 2014.
Automakers sold 150,789 cars in India last month, down 10.4% from the same month last year, and the first fall in April sales since 2002, according to SIAM data.
Sales of motorcycles fell 2.1% to 843,889 vehicles during the month, SIAM said, but truck and bus sales were up 0.8% at 56,678 vehicles.