India car sales shrink for second year

NEW DELHI, Apr 11 (AFP) : 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 per cent 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 per cent, mirroring economic growth at a decade-low of 5.0 per cent.

"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 per cent".

"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 per cent in 2013-14 but saw its hopes dashed.

India's passenger car market was last in negative growth territory a decade ago.