India car sales grow at slowest pace in 2 years

NEW DELHI, May 9, 2011 (AFP) – Indian car sales grew at the slowest pace in nearly two years in April, data showed Monday, as price hikes, rising fuel costs and more expensive loans kept buyers out of showrooms. Domestic passenger car sales in Asia’s third-largest economy rose by 13.18 percent to 162,825 units in April from 143,862 units in the same month the previous year, the Society of Indian Automobile Manufacturers (SIAM) said.

The growth was down from the more than 24 percent year-on-year jump posted in March and SIAM said it marked the slowest pace of expansion since June 2009.

“Consumer confidence is low” amid economic uncertainty, SIAM senior director Sugato Sen said.

Domestic car sales grew by 30 percent to 1.98 million units during last year — the most in more than a decade — fuelled by an increasingly affluent middle class, new model launches and cheap loans.

But industry experts have warned that surging raw material input costs of such goods as steel and rising domestic borrowing costs would put the brakes on such explosive growth.

“We expect there will be some delay in purchases due to higher interest rates and higher prices,” SIAM’s Sen said.

However, Ind