India car sales slide 26pc, biggest drop in 12 years

NEW DELHI (AFP) – Car sales in India’s once-booming  passenger market plunged nearly 26 per cent last month on an annual basis, their  worst performance in 12 years, industry figures showed Monday.

Car sales, seen as a key pointer to overall economic health, slid by 25.71  per cent to 158,513 units in February from the same month in 2012, the Society of Indian Automobile Manufacturers (SIAM) said.

Completed Maruti 800 (796cc) cars are parked at the sales and despatch area at the factory of Maruti Udhyog Limited (MUL) in Gurgaon, Haryana

With one month left to report in the financial year, SIAM forecast annual  sales would shrink for the first time since 2002-03. Sales have contracted by 4.64 per cent in the April to February period from a year earlier.

“Discretionary spending on cars has pretty well come to a stop with the  economy slowing – if people don’t need a car, they are holding back,” SIAM  deputy director general Sugato Sen told reporters.

“The weak economy, high inflation and high finance costs mean people at the  bottom of the pyramid who buy the smaller cars, which are the biggest part of  the market, are not buying,” he added said.

The car sales were the latest grim figures for India, Asia’s third-largest  economy, which is forecast to grow by just five per cent in the current  financial year to March 31 – its weakest pace in a decade.