India's auto sales plunged in October
MUMBAI, India (AP) — Sales of passenger vehicles in India fell by 9.1 percent in October, as high interest rates and tight consumer credit took their toll on what had been one of the world's fastest growing automobile markets, according to the Society of Indian Automobile Manufacturers, an industry group.
Commercial vehicles were even harder hit, with sales falling 36 percent, compared with October 2007.
Total vehicle production fell by 12.3 percent over the same month last year.
"I've not seen this since 1997" when India was roiled by the Asian financial crisis, said Dilip Chenoy, the industry group's executive director .
"The current trend could be greatly reversed if we could address the issue in the financial sector and if liquidity could improve so that interest rates come down," he said.
Eighteen months ago, car loans cost 7 to 9 percent a year; now they are running 17 to 18 percent, according to the Indian automakers group.
Commercial vehicle sales have also been hit by slowing industrial production.
Some automakers are temporarily shuttering plants in response to waning demand.
Tata Motors imposed production holidays at three of its commercial vehicle plants this month to avoid unnecessary inventory build up, said company spokesman Debasis Ray.
Work at the Jamshedpur plant halted Nov. 6 - 8; the Lucknow plant will be shut Nov. 10-15, and the Pune plant will close Nov. 21-26. Workers will not lose any wages, Ray said.
Production at Tata's passenger car plant in Pune has not been changed, Ray said.
Overall, from April to October, 5.9 million vehicles_including passenger cars, commercial vehicles and two-wheelers_were sold in India, up 5.6 percent from the same period last year. Some 918,457 vehicles were exported, up 29.3 percent from the same period last year. Most export growth came from the passenger car segment, according to the automobile manufacturers society.
From 2002 to 2007, vehicle sales in India grew, on average, 14.3 percent a year.
