India’s car sales fell in July from a year earlier, the first monthly decline since January 2009, after higher interest rates and production changes at Maruti Suzuki India Ltd. damped deliveries.
Automakers sold 133,747 cars in the country last month, a 16 percent drop from a year earlier, according to data released by the Society of Indian Automobile Manufacturers in New Delhi today. The decline in July was the biggest since November 2008.
India’s central bank has raised key interest rates 1.75 percentage points this year to rein in inflation, driving down demand for cars in a country where about 80 percent of purchases are funded by loans. Maruti, maker of almost half the cars sold in Asia’s third-biggest economy, said in June it may miss its forecast of as much as 15 percent sales growth in the year that started April 1 amid higher borrowing and fuel costs.
“Interest rates have gone up and there’s been a fairly sharp increase in prices of diesel and petrol,” Vishnu Mathur, the group’s director general, said in New Delhi today. “All these put together have impacted the market sentiment.”
State-owned Indian Oil Corp., the country’s largest refiner, increased the price of gasoline by 5 rupees (11 U.S. cents) a liter to 63.37 rupees in New Delhi in May. That was the biggest increase since June 2008.
Maruti, Tata Motors
Sales at Maruti, a unit of Suzuki Motor Co. fell for the second consecutive month in July as the company stopped making the Swift hatchback ahead of the introduction of a new variant, and the automaker shifted production of the DZire sedan to another factory, the New Delhi-based company said last week.
Tata Motors Ltd., the Indian owner of Jaguar and Land Rover, sold 63,761 units in July, a decline of 6 percent, from a year earlier, the Mumbai-based company said Aug. 1. Local passenger-vehicle sales fell 38 percent to 17,192 units, while sales of the Nano, the world’s cheapest car, dropped 64 percent.
Maruti rose 2.9 percent to 1,247 rupees as of 1:57 a.m. in Mumbai trading. The stock has dropped 12 percent this year, compared with a 16 percent fall in the benchmark Sensitive Index. Tata Motors rose as much as 6.5 percent, the biggest intraday gain since Feb. 25, and traded at 840.85 rupees.
Industrywide sales of trucks and buses increased 24 percent to 64,241 in July, according to the group. Two-wheeler sales climbed 13 percent to 1.06 million.