India’s passenger car sales reportedly dropped more than 10% 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.
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Reuters noted that the highly competitive Indian automobile industry is battling higher inputs costs of steel, rubber and plastic and an unpopular purchase tax that ranges from 4% to 12.5% of the cost of a vehicle.
The Society of Indian Automobile Manufacturers (SIAM) reportedly said on Friday that domestic car sales dropped 10.65% to 63,084 units in July from 70,606 units in the same month a year earlier.
Reuters noted that car sales had dipped 0.9% year on year to 64,464 units in June but cumulative volume sales in the first four months of the financial year to March 2006 were still up about 3% year 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, the report added, noting that sales of commercial vehicles, such as buses and trucks, rose due to heavy road and infrastructure building in the world’s 10th-largest economy.
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By GlobalDataCommercial vehicle sales rose 4.8% to 23,831 units in July and about 2% in the April-July period to 91,291 units, Reuters added.
