Passenger car sales in India are likely to slow down further as hardening interest rates, high fuel prices and rising cost of vehicles hurt consumer confidence, according to industry body Society of Indian Automobile Manufacturers (SIAM).
Car sales in the country, which recorded robust growth of 30 per cent in the last fiscal year, are seen growing only 10-12 per cent in FY12, SIAM said today.
SIAM's earlier projections had pegged sales growth at 16-18 per cent in domestic passenger car sales.
India's domestic passenger car sales fell close to 16 per cent in July, according to data released by SIAM on 10 August.
Passenger vehicle sales, including cars, vans and SUVs, were down 5.7 per cent in August, the second drop in two and a half years, SIAM said.
According to Pawan Goenka, president of SIAM, while it was hoped that the industry would achieve the overall growth forecast, SIAM might need to revise growth projection for passenger vehicles and commercial vehicles further.
At the same time, a number of top automakers, including Toyota, GM and Honda Motorcycle, are considering hiking vehicle prices marginally to counter increasing raw material costs.
However, companies remain cautious as any rise in vehicle prices could hit the already slow demand even further.