Dampened by rising loan rates, raw material cost and fuel prices car sales during April increased at the slowest pace in nearly two years.
According to data released by the Society of Indian Automobile Manufacturers on 9 May 2011, domestic car sales rose 13% yearon-year to 1.62 lakh in April, the slowest growth since June 2009.
"Growth has also been slower on account of base effect. As loans have become costlier, volume growth for cars and commercial vehicles will see some pressure as majority of sales are on loans," says Prayesh Jain, assistant vice-president, research, India Private Clients, IIFL.
"Though the growth in the sector is likely to remain subdued over the short term, thanks to rural growth, rising disposable incomes and favourable demographics, the long-term outlook for the auto sector remains bright," says Madhumita Ghosh, vice-president, research, Unicon Financial Intermediaries.
