The annual sales of car in India dropped down for first time in 10 years, depicting the impact of slowdown in the economy in crucial sectors. In the time duration of 12 months up to 31 March 2013, the auto sales sank 6.7 percent from 2012, according to the Society of Indian Automobile Manufacturers (SIAM).
The initial forecast of SIAM was of 10-12 percent in sales. SIAM announced that meltdown in economy as well as higher rates of interest were main factors which led to this decline.
According to SIAM, the overall auto sales for the 2012-2013 period were 1.89 million, in comparison to 2.03 million in 2011-2012. Key players of the auto industry and the analysts forecasted that auto sales would remain subdued till the borrowing costs were decreased and economy started picking pace again.
It is worth noticing that in the recent past, India was among the fastest growing car markets in world. The analysts also predicted that the auto sales in India would touch the 9 million benchmark by 2020. But between March 2010 and October 2011, the Reserve Bank of India (RBI) increased the rate of interest 13 times. The economic growth of India too, slowed down, thus giving a blow to the consumer demand.
The Indian economy grew by 5 percent in year till 31 March 2013, which is the slowest economic pace of India in 10 years time.