As concerns pile up about the health of the emerging nation's economy, Indian car sales slid 19% in August, the first fall in ten months, industry figures showed on Monday.
Monthly domestic sales declined from 145,066 cars a year earlier to 118,142, the Society of Indian Automobile Manufacturers (SIAM) said, blaming high interest rates and fuel prices.
Auto manufacturers have been offering discounts and promotional schemes to attract customers while also introducing new and upgraded models to the market, but sales have remained sluggish.
SIAM had projected auto sales to rise by nine to 11% this fiscal year -- far higher than last year when growth was at 2.2% as the sector was hit by sharp rate hikes to curb inflation. But on Monday SIAM said that the financial year forecast was unlikely to be met.
"If the declining trend continues and if September sales are also poor, it will be very difficult to meet the growth target," SIAM senior director Sugato Sen said.
"We are entering a desperate situation. We need help from the government," he told reporters in the capital New Delhi.
Car makers are hoping sales pick up in the festive season, which runs through to November, when Indians make big-ticket purchases from property to electronics as it is considered an auspicious time to buy.
The weakening auto market data comes as India's once-booming economy grew by just 5.5% between April to June -- its slowest expansion in three years.
Unlike other central banks which have been cutting rates to spur growth, the Reserve Bank of India has been holding back, saying it wants inflation to come down from stubbornly high levels of near 7% before it acts.
Copyright Agence France-Presse, 2012