Cars sales grow 7.64 per cent in November

India's domestic passenger car sales rose 7.64 per cent in November, slowing after three months of double-digit growth as buyers postponed year-end purchases to the next year to boost resale values, analysts said.

Data released by the Society of Indian Automobile Manufacturers on Friday showed car sales in November rose to 41,140 units from 38,220 in the same month last year.

Sales in April-November, the first eight months of this financial year ending in March 2003, rose 7.65 per cent to 344,924 units from 320,403 units in the year-ago period.

Analysts said car sales typically weaken towards the end of the year in November and December as buyers postpone purchases to the new year in a bid to boost resale value of their vehicles.

Resale value is a crucial input in car-buying decisions in India and the year of purchase is a key influence on the resale value.

"You don't expect big car volumes in November and December anyway because resale values could drop eight to 10 per cent if they are bought at the year-end instead of January," Avinash Goarkshakar, an analyst at Emkay Share and Stock Brokers, said.

"But January, February and March should be good and we should finish the year with 10 per cent plus growth."

India's new car sales inched up a mere 0.48 per cent in the past year to March to 570,473 units as slowing industry growth, flat exports and fears of war with neighbour Pakistan hit consumer sentiment.

Sales fell in April and May, the first two months of this financial year, but have risen since then as carmakers cut prices, offered discounts and a host of freebies to lure buyers in a sharply competitive market.

The SIAM statement said sales of commercial vehicles, or trucks and buses combined, jumped 23.5 per cent to 14,279 units in November from 11,566 in November 2001.

Sales in April-November were 114,152 units, up 30.9 per cent from 87,219 in the same period last year.

Motorcycle sales in the world's largest market after China jumped 36.4 per cent in November to 359,120 units from 263,271 in the year-ago period, continuing the previous year's growth.