Maruti Suzuki India Ltd., maker of half the cars in the country, said sales fell for the first time in five months in August as higher interest rates and inflation damped demand.
Sales fell 9.2 percent last month to 59,908 cars, vans and sport-utility vehicles, the New Delhi-based unit of Suzuki Motor Corp. said in a statement today. That was Maruti's biggest decline in monthly sales since Feb. 2006, according to Bloomberg Data.
Interest-rates at a seven-year high and the fastest inflation rate in 16 years are squeezing consumer spending in India. Slowing growth may undermine a government target of tripling car sales to 3 million vehicles annually by 2015.
"Condition for auto sales have been deteriorating,'' said Mahantesh Sabarad, an analyst with Centrum Broking Pvt. in Mumbai, who has an "accumulate'' rating on the stock. "there has been a substantial increase in interest rates and fuel prices also went up.''
More than half of the vehicles sold in the nation are bought on credit. Maruti said domestic sales fell 10.2 percent to 54,113 vehicles in August. Exports gained one percent to 5,795.
Maruti, 54 percent owned by Japan's Suzuki Motor, fell 2.1 percent to 635.9 rupees at 10:36 a.m. in Mumbai trading.
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