Indian automakers have dropped for the second time the auto sales target for this year, due to increasing interest rates and slowing economic growth.
The Society of Indian Automobile Manufacturers announced it reduced the growth forecast to as low as 1%, taking into consideration that the auto sales in the year ended March increased only 0.2%. In July the growth target for the year was reduced to 9%, from a 10-12% target given in April. This forecast shows the difficulties automakers such as Toyota and Suzuki will have to face to attract customers in India, Asia’s third-biggest auto market.
The automakers have already begun introducing new and upgraded models and offer bigger discounts to attract buyers and boost sales in the festive season. According to the Society of Indian Automobile Manufacturers domestic sales in September were down 5.4% to 157,536 units, due to the European crisis which made the region’s auto market fall to the lowest level in 17 years.
Hyundai reported sales in India decreased 14% in September to 30,851 vehicles, Tata’s sales were down 18% and Toyota’s sales were down 5.4%. Auto demand has been severely affected by the borrowing costs and high gasoline price, taking into consideration that India’s auto sales are 80% based on loans.