New Delhi, Aug 9: As the India's economic growth is heading towards classical Hindu growth rate, demand for car sales is also going in that direction. According to industry body Society of Indian Automobile Manufacturers (SIAM) car sales in July grew 6.7% to 143,496 units from 134,473 units in the corresponding month a year-ago.
As India's GDP growth clocked its 5.3% in Jan-Mar quarter, the slowest growth in nine years, factors like high inflation, high interest rate started effecting vehicle demand. Total two-wheeler sales in July increased 7.5% to 1,132,696 units from 1,054,120 units in the same month in 2011. Motorcycle sales rose just 5% to 821,821 units in the month from 782,852 units in July 2011, SIAM data showed.
Sales of trucks and buses grew just 1.2% in July to 65,008 units from 64,234 units in the same month a year ago, forcing manufacturers to cut production.
As the monsoon has been forecast to remain below normal the demand for vehicles are expected to be head southward in coming month, with hope to pick up in festive season starting in October.
Interestingly SIAM expects sales to move upward and accordingly revised the car sales growth forecast to 10%-12% for FY13, from 9-10% projected in June.
Lack of policy clarity on diesel pricing and increasing gap between the petrol and diesel prices forcing car makers to launch diesel variants, putting pressure on their already strained finances. Sales of diesel variant cars now account of about 40% of the total car sales, almost double of the 20% a year-ago.