India's local car sales in October fell the most in more than a decade. In a downward spiral for the fourth consecutive month now, local car sales declined 24% to 138,521 units from 181,704 a year earlier, showed data issued by the Society of Indian Automobile Manufacturers today.
Our view: October is a festival month for India. The fall in car sales in October needs to be taken seriously by the government. The continuous rise on petrol prices and ever rising interest rates are the key reasons. It reflects decline in demand of the consumer durables sector. Consumers are postponing their demand for consumer durables and are buying only when needed urgently. The fall in October car sales in not cyclical and reflects the health of the Indian economy. Unless Food price inflation comes down on a sustained basis, it will result in lower growth for India. The Rupee has weakened to 50.0100 against the US dollar (usd/inr) on fundamentals. More weakness will be there for the Usd/inr if such type of numbers come from India. We expect the Indian GDP to grow below 7% in fiscal year 2011-2012. Do not go by the headline statistical numbers. The ground reality is different.
Disclaimer:Any opinions as to the commentary, market information, and future direction of prices of specific currencies, metals and commodities reflect the views of the individual analyst, In no event shall Insignia Consultants or its employees have any liability for any losses incurred in connection with any decision made, action or inaction taken by any party in reliance upon the information provided in this material; or in any delays, inaccuracies, errors in, or omissions of Information.Nothing in this article is, or should be construed as, investment advice. Prepared By Chintan Karnani. Website www.insigniaconsultants.in
-- Posted Wednesday, 9 November 2011 | Digg This Article | Source: GoldSeek.com
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