India''s car sales boom as Chinese market slackens

08 August 2006

Mumbai: Domestic car sales in India posted a 28.41 per cent rise in July this year, despite high fuel prices, even as China, the world's second-largest vehicle market, saw its July car sales growing at the slowest annual pace of 5.39 per cent in the same month. The lower Chinese sales were attributed to new levies and higher fuel prices as also a fall in demand for sports utility vehicles.

Passenger car sales in India in July this year rose to 81,038 units against 63,104 units in the same month last year, aided by a reduction in excise duty on small cars.

Car sales in China for the same period, at 332,600 units were up just 5.39 per cent from a year-ago period, according to data provided by the China Association of Automobile Manufacturers. Sales rose 5.82 per cent in the month before.

Sales of SUVs plunged 19.69 per cent to 14,700 units after Beijing raised retail prices of gasoline by 9.6 per cent in May. Increased consumption taxes for vehicles with larger engines also dampened demand.

According to figures provided by the Society of Indian Automobile Manufacturers (SIAM), car sales for the April-July, the first quarter of the financial year ending March 2007, were up 25 per cent at 324,671 units against 260,025 in the same period last year.