Car sales in India fell by around 15% in July compared to a growth of 38% in the same month last year, according to a report released by Crisil Research here today.
"Increase in fuel prices and interest rates affected consumer sentiment. The 7% increase in diesel prices announced in June 2011 further impacted cars sales, given that diesel models now account for over a third of car sales," the report said.
A 31% fall in domestic car sales of Maruti, which accounts for 49% of domestic car sales, led the decline. Maruti's car sales fell mainly because it discontinued production of its old 'Swift' series and volumes of Swift Dzire declined, with a shift in the model's production facility.
Maruti's 'Swift Dzire' and its old 'Swift' series, together account for around 25% of the company's total domestic car sales. Maruti will make the new 'Swift' series available to consumers in mid-August.
Notably, though the top three car manufacturers reported a 29% fall in sales with rising dealer inventories, the rest of the manufacturers reported a 45% growth in volumes driven by more than five model launches.
"The fall in volumes clearly manifests weakening consumer sentiment over rising cost of car ownership. Model launches, along with the onset of the festive season, will, however, revive sales growth in the second half of 2011-12," Crisil Research's Head, Sridhar Chandrasekhar, said.
