India's November car sales fall worst in eight years

New Delhi: Car sales in India dropped by nearly 20 per cent in November, the worst fall in eight years, intensifying the woes of global automakers who had bet emerging markets would make up for waning demand in developed markets.

Automakers have long seen emerging markets like India, China, Russia and South America as their long-term target, anticipating robust demand from there and spotting opportunity in their low-cost manufacturing.

But sales have slumped spectacularly across developed markets like the United States, Japan and Eur-ope, as well as emerging economies like China and Russia, forcing automakers to revisit their plans for developing markets.

Indian car sales in Nov-ember fell to 83,059 units from 103,031 a year ago, data from the Society of Indian Automobile Manufacturers (SIAM) showed on Wednesday.

Sales of trucks and buses in India, the world's fourth largest market for such vehicles, slumped by nearly half from a year ago, steeper than a fall of 48.6 per cent in January 1998. Bike sales fell by a fifth to 431,171 units. "In our history, all segments have never been down so badly together in a month," SIAM's director general, Dilip Chenoy, told reporters after releasing the month's numbers.

Blame game

Much of that decline is blamed on scarce and expensive auto loans, the result of a hawkish monetary policy the Reserve Bank of India adopted till mid-October, and on a slowing domestic economy.

The worsening numbers from India follow reams of similar data from across the world.

US car sales in November fell 37 per cent to a seasonally adjusted annual rate of 10.5 million, the lowest level since 1982, even as officials in that country moved towards a $15 billion bailout plan to prevent the collapse of the Detroit big three.

In Japan, they were down 27 per cent to the lowest in 39 years. Chinese sales were down 10.3 per cent, the third straight monthly fall, while Russian foreign car sales fell 15 per cent.

Automakers' developing market plans are consequently coming in for hasty review. On Tuesday, partners Renault SA and Nissan Motor Co said they would have only one shift at a proposed car plant in India, instead of the initially planned two, when the unit comes up in the first half of 2010. China's Chery Automobile said on Tuesday it had ended talks with Chrysler to sell cars in South America.