Car sales offer more data on India’s slowdown

In another article decrying a possible slowdown in the Indian economy due to the paralysis of Manmohan Singh's United Progressive Alliance, India's Outlook magazine notes that car sales have plunged due to high interest rates, runaway inflation and higher fuel costs.

After about 25 per cent growth over the past few years (and even during those nervy slowdown times in 2008 and 2009), alarm bells are clanging at the prospect of substantially lower growth, the magazine said.

Last week, industry body Society of Indian Automobile Manufacturers (SIAM) slashed its projection for 2011-12 passenger car sales growth from the earlier 16-18 per cent to 10-12 per cent.

India's interest rates are now higher than ever (virtually), with the central bank taking aggressive moves to lower inflation. However, inflation also remains high, and 90 percent of the cars made in India run on petrol (gasoline) even as high fuel costs drive customers toward diesel vehicles.