Car Sales Drop 12% in India

Registrations of new passenger cars in India fell to 173,400 units last month compared with 198,100 units in January 2012, according to the Society of Indian Automobile Manufacturers.

January marks the third consecutive month of year-over-year declines in the country's car sales. Analysts attribute the slump to steep fuel costs, high interest rates and weakness in the domestic economy that has eroded consumer confidence.

SIAM, which originally forecast a gain of as much as 12% in India's sales in the 12 months ending March 31, now predicts volume will shrink for the first time in 10 years.

Sales of all passenger vehicles in the country slid 5% last month, buffered by a 41% surge in SUV demand.

India's commercial-vehicle volume dropped 10% to 63,200 units in January, including a 39% plunge for medium- and heavy-duty trucks, the trade group reports. It says big inventories of used heavy-duty trucks are discouraging truckers from trading in their vehicles for new ones.

Sales by industry leader Maruti Suzuki were almost flat at 88,600 units last month. Demand rose 1% to 34,200 units at Hyundai but plummeted 61% to 11,200 vehicles at Tata. Ford, General Motors, Nissan, Skoda and Toyota also posted lower volume.

In the April-January period, India's car registrations dipped 2% to 1.56 million vehicles, SIAM says.