* FY13 car sales growth seen at 0-1 pct -industry body
* Flat growth would be lowest in nine years
* Motorcycle sales estimate also cut
* High cost of credit, fuel; slowing GDP growth hurting
* Industry to plead with govt for car-friendly budget
(Adds quotes, detail)
By Anurag Kotoky
NEW DELHI, Jan 9 India's car sales are expected
to post their weakest growth in nine years, if any at all, as
automakers such as Tata Motors and Maruti Suzuki
battle with falling demand due to high interest rates
and rising car ownership costs.
Slumping GDP growth, rising fuel prices and expensive credit
have slashed car sales in India, a market that was the toast of
the industry two years ago and has attracted billion-dollar bets
from global manufacturers hungry for growth.
"Negative sentiment among lower-end customers by virtue of
interest rates not coming down, high fuel charges; all these put
together is hurting sentiments," said S. Sandilya, president of
the Society of Indian Automobile Manufacturers (SIAM).
SIAM cut its car sales growth forecast for the year that
ends in March to 0-1 percent on Wednesday, its third downgrade
this financial year from an initial estimate of 10-12 percent.
Car sales in India, where major players include Tata, Maruti
and South Korea's Hyundai Motor Co, have grown every
year since the financial year that ended in March 2004.
Lobby group SIAM will appeal to the government for
industry-boosting measures including cutting taxes on larger
cars in March's federal budget, Sandilya told reporters at a
quarterly press briefing in New Delhi.
"Going by current trends, we do not think the industry will
be able to recover in the fourth quarter (January-March) unless
government extends full support," said Sandilya, who called on
the central bank to reduce "extremely high" interest rates which
currently stand at 8 percent.
Most of India's large and rapidly-growing middle class,
largely responsible for powering car sales growth, depend on
loans and credit for big purchases.
SIAM also cut its forecast for motorcycle sales growth this
financial year to 3-5 percent from 5-7 percent previously, and
for commercial vehicles to 0-2 percent, again citing high
interest rates and slowing economic growth.
Car sales in December fell 12.5 percent year-on-year, SIAM
said, their second straight monthly decline and fourth in five
months. Sales so far this financial year are down 0.33 percent
on the same period a year ago.
After a 30 percent expansion in sales in the financial year
2010-11, a slew of global carmakers including Ford,
General Motors, and Nissan invested billions of
dollars in building up their Indian operations.
But a series of interest rate rises by the inflation-wary
Reserve Bank of India combined with a slowdown in India's
once-breakneck GDP growth saw sales growth fall to just 2.2
percent last year.
(Writing by Henry Foy; Editing by Daniel Magnowski)