Car sales in India have taken an unexpected hit in July, a result of rising fuel prices

New car sales in India have dropped by 16 per cent, the nation’s biggest decline since November 2008.

The Society of Indian Automobile Manufacturers (SIAM) has revealed the market’s first decline since January 2009, with 133,747 cars sold in July compared with 2010’s figure of 158,767.

The director general at SIAM, Vishnu Mathur, said that the fall in July sales was due to a combination of higher interest rates, a sharp increase in fuel prices and Maruti Suzuki’s loss of production.

Maruti Suzuki, India’s largest car maker had undisclosed production issues, which resulted in the company producing 17,000 fewer vehicles this July.

Truck and bus sales, however, increased by 24 per cent in the same month, helped by the increasing demand for Tata Motors' light trucks.

Read about last year's record Indian new car sales

Niki Sorabjee

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