Car sales suffer biggest drop in 10 years

Car sales in India registered their steepest monthly decline in over 10 years in October, tanking by 23.77 per cent on account of a huge drop in output by the country's largest car-maker Maruti Suzuki due to labour trouble, coupled with high interest rates and fuel prices.

According to figures released by the Society of Indian Automobile Manufacturers (SIAM) on Wednesday, domestic passenger car sales stood at 1,38,521 units in October, as against 1,81,704 units in the same month last year.

This is the fourth consecutive decline in car sales on a year-on-year basis since July, mainly due to the severe impact of labour issues on Maruti Suzuki India's production.

"This is the steepest decline since December, 2000, when car sales in the country dropped by 39.86 per cent," SIAM Director General Vishnu Mathur said.
The industry was expecting positive sales growth in October, due to the festive season, but it did not happen, he added.

"The reason for the fall is mainly due to the high interest rates and high fuel prices and also a big drop (in output) by Maruti Suzuki," Mathur said.

Maruti Suzuki India has been facing labour problems at its Manesar plant since June this year, which resulted in either the complete or partial stoppage of production on three separate occasions.

In October, MSI's sales declined by 55.11 per cent to 41,192 units from 91,754 units in the same month last year.

Rival Hyundai Motor posted a 5.31 per cent fall in sales to 32,811 units in October this year from 34,651 units in the same period last year.

Tata Motors also reported a marginal dip in sales to 20,948 units from 21,093 units in the same period last year.