Monsoon fury could impact car sales in July

New Delhi: The Indian automobile industry is already witnessing a slowdown in demand in the wake of rising interest rates.

The industry now could face another blow with floods in many parts of the country likely to have an impact on sales.

"In the short term there is likely to be an impact on sales of cars due to the rains," PTI quoted Maruti Udyog’s Managing Director Jagdish Khattar as saying.

He insisted in the long term it was good as rains could help in improving rural economy, which could translate into better sales coming from villages.

Khattar also said if the rains prolonged, there could be worrying signs for the industry.

Heavy rains have disrupted normal life in West Bengal, Kerala, Gujarat, Rajasthan, Maharashtra, while more than 600 people have died due to rains and floods since June.

General Motors India Vice-President Corporate Affairs P Balendran said as of now there was no impact on inbound material and outbound products of the company.

"We have to see how things pan out as we go along. But overall, for the industry sales could slow down as the three major markets - west, south and east - are under floods and customers may not go for purchases at the moment," he added.

Echoing similar views, a Honda Siel Cars India spokesperson said floods could dampen sales.

"It adds to market sentiments as interest rates are already high but the major impact of floods is in delivery delays, especially in south-bound traffic," the official said.

Although June car sales for most of the companies were either up or flat, the industry as a whole has been feeling the heat of rising interest rates.