India’s automakers’ association lowered its full-year domestic car sales forecast for the third time in six months as slowing economic growth and high interest rates continue to keep buyers from showrooms.
The Society of Indian Automobile Manufacturers forecast as little as no change in car sales in the year ending March 31, Sugato Sen, the deputy director general of the industry group, said in New Delhi today. Car sales increased 0.2 percent in the year ended March 2009, according to the group. The annual forecast for growth in local car sales was cut to as low as 1 percent in October after being reduced in July.
The forecast underscores the challenge carmakers from Suzuki Motor Corp. to Toyota Motor Corp. will face to win customers in Asia’s third-biggest auto market. New models and variants are being introduced and discounts offered as automakers seek to spur sales as high gasoline prices and borrowing costs discourage buyers.
Local deliveries in December fell 13 percent to 141,083 cars, the second consecutive monthly decline, the group said.
The slowdown in India comes as the European debt crisis dragged the region’s auto market down to a 19-year low at the end of November, according to the Brussels-based European Automobile Manufacturers’ Association. China’s state-backed auto association will release monthly sales data on Jan. 11.
Domestic sales of Maruti, the local unit of Suzuki, rose 5.9 percent in December, spurred by demand for its hit Ertiga minivan. Its passenger car sales declined 0.9 percent to 68,729 units.
Hyundai Motor Co. said on Jan. 1 its Indian sales last month fell 9.6 percent to 29,516 vehicles. Tata Motors, maker of the world’s cheapest car, the Nano, reported a 51 percent drop in passenger-vehicle sales for December, while Toyota’s India sales declined 24 percent.
India has the biggest current-account deficit among the largest emerging markets, stoked by the worst export slump since the 2009 global recession and gold imports that Finance Minister Palaniappan Chidambaram said are a “huge drain.” Trade and budget gaps have increased economic risks, the Reserve Bank said Dec. 28, even as the government tries to lure more foreign investment and limit subsidies as Asia’s No. 3 economy struggles.
The Finance Ministry predicts GDP growth of as little as 5.7 percent in the year to March 31, the least in a decade. India’s central bank raised interest rates a record 13 times from March 2010 to October 2011 to rein in inflation.