NEW DELHI: Sales of India's once-booming passenger car segment shrank for a second year, hit by a sharp economic slowdown and high borrowing costs that kept customers away from showrooms, data showed Friday.
The Society of Indian Automobile Manufacturers (SIAM) said it hoped for a "moderate improvement" this year with a new government due to take power after marathon elections in the country of 1.2 billion that began this week.
Passenger car sales contracted by 4.59 percent in the last financial year to March 2014 over the previous year to 2.3 million units.
Total commercial vehicles such as trucks and goods carriers slid by 16 percent, mirroring economic growth at a decade-low of 5.0 percent.
"We're hoping for moderate improvement this year," said SIAM president Vikram Kirloskar, but gave no precise forecast except to say growth should be "more than zero percent".
"We hope it's the end of our winter of discontent. This has been one of the most difficult years for the industry. We've had continuous decline over the last two years," he told reporters.
The industry body had initially forecast passenger car sales growth of three-to-five percent in 2013-14 but saw its hopes dashed.
India's passenger car market was last in negative growth territory a decade ago.
New launches and discounts failed to woo customers in the face of weak consumer confidence, high interest rates due to stubborn inflation and rising fuel prices.
Kirloskar said economic growth "is still not encouraging. We need more than seven-to-eight percent growth to see good growth in auto sales".
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