High prices, costly financing hit auto sales in 1HFY23

Auto sector, barring the bus segment, recorded a steep decline in sales ranging from 28.4-56.5 per cent during the first half of 2022-23. With a 40pc drop, total car sales stood at 68,900 units in July-December compared to 114,774 units in the same period last year. Buyers’ reluctance stemmed from rising prices coupled with high-interest rates making leasing more expensive, curbs on auto financing and non-opening of letters of credit resulting in parts shortage that led to production halts by various assemblers and late delivery in Japanese models, etc also depressed the demand for automobiles. Due to the change of model year, buyers also slowed down purchasing of vehicles which plunged car sales in December 2022 to 13,768 from 15,432 units in November.