Domestic car sales registered a negative growth for the first time in nearly three years with July sales posting a 1.71 per cent decline as compared to the same month last year, while total two-wheeler managed to clock a positive 19.47 per cent.

Society of Indian Automobile Manufacturers, which released the figures on Monday, attributed the degrowth to rising oil prices, higher interest rates and mainly lack of finance.

"This is the first time since November 2005 that the passenger vehicle segment registered a decline. Overall inflation and RBI measures to contain it, oil prices hike and mainly cost of finance and its availability have impacted the growth in this segment," SIAM Director General Dilip Chenoy told reporters.

The challenges continued to be the availability of finance, specially in the semi-urban and rural areas, he added.

The passenger car segment clocked sales of 87,724 units during the month, against 89,250 units in the same month a year ago, SIAM said.

Total domestic vehicles sales stood at 7,78,907 units compared to 6,81,771 units in the same month last year.

"In the overall context of inflation and the drive by RBI to curtail money supply to curtail credit growth. . . these outcomes were expected, but while they may help in controlling inflation, they are not helping the automotive industry in some manner," Chenoy said.

The cycle time for granting loans had gone up hugely and according to some manufacturer, for the low-end and first time vehicle buyers, it had gone up to two months or more, he said.

"Some members have also said percentage of financing the cars has dipped to below 70 per cent as against 85 per cent that was happening earlier," Chenoy added.

Car market leader Maruti [Get Quote] Suzuki India's sales grew 1.45 per cent to 45,757 units in July against 45,101 units in the same month in 2007. 

Rival Hyundai Motors recorded a flat month by selling 15,061 units during July compared to 14,981 units in the same period last year.

Homegrown major Tata Motors [Get Quote], however, recorded a decline of 8.87 per cent at 12,012 units against 13,181 units in the same month previous year.

General Motors India had a 48.7 per cent jump in its sales at 4,415 units compared to 2,969 units last year.

"Current situation is a temporary phenomenon. Hopefully, coming festive season and new launches would help the industry in maintaining a double digit growth," Chenoy said.

Total two-wheeler sales in the month rose by 19.47 per cent at 5,99,369 units against 5,01,691 units in the same month last year, SIAM said.

On the motorcycles front, sales jumped by 21.91 per cent at 4,57,178 units against 3,75,004 units during the year-ago month.

Market leader Hero Honda Motors [Get Quote] sold 2,60,324 units in July against 1,86,848 units in the same period, 2007, up 39.32 per cent.

Rival Bajaj Auto [Get Quote], however, posted a decline of 2.46 per cent at 1,13,440 units compared to 1,16,305 units last year.

TVS [Get Quote] Motor's sales jumped by 11.95 per cent to 39,448 units against 35,237 units in the same month last year.

In the scooter segment, total sales were up 6.36 per cent at 97,905 units, against 92,048 units.

Scooter market leader Honda Motorcycle & Scooter India registered sales of 56,584 units against 51,062 units, up 10.81 per cent, while Hero Honda Motors pushed its sales by 56.98 per cent at 12,340 units from 7,861 units in the same month last year.

Suzuki Motorcycle India, the new entrant in the segment, sold 6,989 units.

In the three-wheeler segment, total domestic sales jumped by 1.51 per cent to 31,357 units against 30,890 units.

Sales of commercial vehicle increased by 1.93 per cent to 34,359 units during July from 33,709 units for the year-ago period, SIAM data said.

Medium and heavy commercial vehicles sales declined by 2.12 per cent at 17,557 units against 17,937 units last year.

Light commercial vehicles sales, however, rose 6.53 per cent to 16,802 units from 15,772 units in the same month last year, SIAM said.