Sales of commercial vehicles is seen as one indicator of the health of the broader economy
NEW car sales in India slid 24 per cent in October compared with the same month last year, the sharpest fall in more than a decade, an industry body has said.
The Society of Indian Automobile Manufacturers (SIAM) said sales fell to 138,521 vehicles last month, down from 181,704 vehicles a year earlier, the biggest decline since a collapse of 39.8 per cent in December 2000.
Car sales have been slowing in India for four straight months now, as high borrowing costs hit one of the world`s fastest-growing auto sectors, which has attracted interest from major global players.
The weak data adds to gloom around the global economy and will hit hopes that emerging markets such as India can power growth as Europe and the United States lose momentum, or dip into recession.
SIAM has already sharply cut its forecast for Indian car sales growth in the fiscal year to March 2012 to between two and four per cent, down from an earlier projection of 10 to 12 per cent.
Domestic car sales grew by 30 per cent to 1.98 million units last year - the most in more than a decade - fuelled by an increasingly affluent middle class, new model launches and cheap loans.
But analysts say that demand has been hit by steep fuel and rising car prices on the back of steeper commodity prices and 13 interest rate hikes by the central bank since March 2010 to tame near double-digit inflation.
Motorcycle and scooter sales saw flattish growth of just 2.01 per cent to 1,147,621 units last month from a year earlier, SIAM said.
Total sales of vehicles across all categories slid 1.05 per cent to 1,441,594 units in October, the organisation added.
But sales of commercial vehicles -- seen as one indicator of the health of the broader economy -- grew by 18.53 per cent to 61,800 units in October from 52,138 a year earlier, the figures showed.
India`s festive season from the end of the Muslim holy month of Ramadan to the Hindu festival of lights, Diwali, is seen as a lucky time for big purchases like cars, property and gold.
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