Auto sales in India dropped 6.7% during the financial year ended in March, the first fall in more than 10 years.
Sales in March also fell 22.5% for the fifth month in a row, to 180,675 vehicles, according to the Society of Indian Automobile Manufacturers. Passenger car sales in the financial year ended March fell 6.7% to 1.89 million vehicles, compared with 2.03 million units sold the previous year. These drops raised questions and concerns regarding the future huge investment programmes announced by foreign automakers, such as Ford.
“The basic problem has been the big downturn in the economy and high interest rates. They have knocked sales,” Sugato Sen, SIAM deputy director general, told AFP.
Analysts estimate that India, the third largest economy in Asia, has grown only 5% in the last financial year, the lowest level in more than a decade, due to a slump in business investment and a low consumer spending. SIAM’s forecast at the beginning of the previous financial year was of 10%-12% annual growth.
“These figures have disappointed all our earlier forecasts — there has been a reversal in buying behaviour,” Sen said.
Now automakers struggle to lure customers with various offers such as ‘buy now, pay later’ or interest-free repayments and discounts of up to 20%.