Car sales in India take the slow lane in May

India's top auto firms have reported lacklustre sales in May, hit by hikes in excise duty and state taxes and rising fuel prices amidst a decline in manufacturing output and a general slowdown of the economy.

Carmakers are struggling to improve sales even as India's economy grows at the slowest pace in nine years.

Maruti Suzuki, the biggest carmaker in the country with a 45-per cent market share, reported a 5.9 per cent fall in car sales in May from a year earlier.

A fall in sales across its mini cars, SX4 mid-size sedan and vans, coupled with a drop in exports dragged down Maruti Suzuki's sales in May to 98,884 units, although there was strong demand for its newly launched Ertiga multi utility vehicle and compact Dzire, the company said.

Tata Motors, the country's No3 carmaker, posted a 6-per cent increase in car sales during the month. Tata Motors' total sales (including exports) of Tata commercial and passenger vehicles in May 2012 were 64,347 vehicles, higher by 4 per cent, over May 2011.

Mahindra & Mahindra, the country's top utility vehicle manufacturer, however, proved an exception despite the generally weak trend in the economy.