INDIAN car sales slid almost 16 per cent in July from a year ago, their biggest drop in nearly three years, as steep borrowing costs kept buyers out of the showrooms, the data showed.
Indian car sales plunged to 133,747 units from 158,767 in the same month last year, the Society of Indian Automobile Manufacturers (SIAM) reported.
Rising sticker prices on the back of steeper commodity prices, higher fuel costs and 11 central bank interest rate hikes since March 2010 to tame near double-digit inflation have combined to hit demand, SIAM said.
"People want cars, they want mobility but they may be postponing their purchases hoping interest rates will go down," SIAM director general Vishnu Mathur said.
The Indian drop was the sharpest since November 2008 when sales fell over 19 per cent as countries worldwide were buffeted by the global financial crisis.
India is the world's sixth-largest automobile market, surpassing France, Britain and Italy and is expected to become the third-largest market globally by 2020, said information services firm JD Power and Associates.
The Indian figures came as passenger car sales in neighbouring China, the world's top car market, rose by 6.7 per cent year-on-year, continuing a trend of modest growth after Beijing ended buying incentives and sought to curb demand to ease traffic congestion in big cities.
The sales downturn in India and China comes as global manufacturers such as Ford, Renault-Nissan and GM have been turning to the emerging economic giants to help offset saturated markets in the West.
