India's passenger car sales dropped more than 10 percent in July, down for a second straight month, as demand suffered because of heavy floods in two big markets, rising costs due to stricter emission norms and higher taxes.
The highly competitive automobile industry is battling higher inputs costs of steel, rubber and plastic and an unpopular purchase tax that ranges from four to 12.5 percent of the cost of a vehicle.
The Society of Indian Automobile Manufacturers (SIAM) said on Friday domestic car sales dropped 10.65 percent to 63,084 units in July from 70,606 units in the same month a year earlier.
Car sales had dipped 0.9 percent on year to 64,464 units in June. A higher base effect was also seen hurting sales.
But cumulative volume sales in the first four months of the financial year to March 2006 were still up about 3 percent on year to 259,994 units.
Record rains in Maharashtra and Gujarat - the two most industrialised states in Asia's third-largest economy - over the past two months have squeezed demand for many consumer products.
But sales of commercial vehicles, such as buses and trucks, rose due to heavy road and infrastructure building in the world's 10th-largest economy.
Commercial vehicle sales rose 4.8 percent to 23,831 units in July and about 2 percent in the April-July period to 91,291 units.
Motorbike sales in the world's largest bike market after China also jumped 5.7 percent to 399,779 units in the past month as juicy discounts because of intense competition and low financing rates fuelled demand.
Sales of bikes jumped 17.7 percent during April to July at 1.71 million units. Over the past decade, users have shifted their preference to fuel-efficient bikes from scooters.