The overall sales in auto industry went down by 4.7% in 2007-08. Auto industry experts say that the slowdown has been due to high interest rates and poor availability of retail finance and a slowing economy.

 

This is a big concern for the auto industry as over the last few years the industry had been riding high on rising salaries, high economic growth and easy finance options. However, the financial year 2007-08 saw the Indian automobile industry moving south as overall sales dropped to 96.48 lakh units against 1.01 crore units in 2006-07, largely due to decline in sales of motorcycles, three-wheelers and goods carriers. The slowdown in this sector comes after 2000-01, when the auto industry saw a negative growth.

 

It is interesting to note that the car sales managed to post a double-digit growth riding on new models and discounts. But even this growth has not come easily as auto companies have to spend a lot to attract new customers. According to Society of Indian Automobile Manufacturers (SIAM), two-and-three-wheelers may continue to face tough times ahead but car sales could continue to grow.

 

The bike sales fell 11% in 2007-08 at 57.68 lakh units against 65.47 lakh units in 2007-06. This fall has been recorded mainly due to declining sales of Bajaj Auto and TVS.