Ahmedabad: General Motors India Pvt. Ltd has lowered its sales expectations for the year because of rising interest rates and fuel prices.
“We were expecting our car sales to go beyond 160,000 vehicles this year (calendar year 2011) up from 110,804 vehicles last year. However, now we have brought down that expectation to 140,000 vehicles as the automobile market is witnessing some depression due to constant hikes in interest rates and fuel rates,” said P. Balendran, vice president, corporate communications.
The reduction in projection is despite the additional sales expected from the newly launched diesel version of the Beat hatchback.
The Reserve Bank of India on Tuesday raised the benchmark repo rate, that at which RBI lends short-term funds to commercial banks, to 8% from 7.5%.
“In the beginning of this year, we were expecting our sales to grow at around 50% against 59.16% growth registered in 2010. Now, we have brought down that expectation to 20-30%,” Balendran said.
General Motors India reported a 1.3% increase in sales in May to 8,329 units from 8,225.
The Society of Indian Automobile Manufacturers (SIAM) scaled down growth expectations for domestic car sales to 10-12% for the financial year 2011-12 from the earlier estimate of 16-18% because of rising interest rates and fuel rates.
In June, India’s domestic car sales grew by just 1.6% from the year earlier, SIAM figures showed.
Balendran said the company expected to “sell around 4,500 units of the diesel variant of Beat per month. Total sales of Beat model (petrol and diesel variants) are expected at around 6,500 units per month.” He was in Ahmedabad to launch the Beat diesel.