Motor

India July car sales rise by 6.7%, weakest in 3 months

India's car sales grew by 6.7 percent in July, their weakest pace in three months, an automobile body reported Thursday as it called for cheaper interest rates to help spur the flagging sector.

Domestic car sales in July climbed by 6.7 percent to 143,496 units, from 134,473 units in the same month last year, according to figures released by the Society of Indian Automobile Manufacturers (SIAM).

The growth rate would have been much weaker but last year's low base helped to improve the figure. Half of the country's 18 carmakers reported a fall in sales in July, despite hefty price discounts to boost business. "These July numbers are not very strong. Sentiment continues to be very weak, but we're hoping interest rates will come down and improve buying sentiment," said SIAM senior director Sugato Sen.

Car loan interest costs are running at 12 to 14 percent, deterring many purchasers, Sen told reporters.

SIAM has projected auto sales will rise by nine to 11 percent this year --far higher than last year when growth slowed to 2.2 percent as the sector was hit by aggressive rate hikes to curb inflation and industrial problems.

Commercial vehicle sales, considered an important barometer of overall economic health, grew by only 1.2 percent in July from a year earlier, to 65,008 units.

While western carmakers might envy the sector's growth, SIAM said it was disappointing for India, where annual expansion of more than 20 percent has been the industry norm in better times.

AFP