India hit by drop in monthly car sales The Chinese and Indian car markets experienced contrasting fortunes in August, with the former posting robust sales while the latter was hit by its first drop for nearly a year. Indian car sales fell 19 per cent to 118,142 compared with the same month in 2011 as slowing growth, high interest rates and a factory shutdown by the country's largest producer hit trading conditions in Asia's third-largest economy. IN Industrials Sales of two-wheeled vehicles fell 8.5 per cent, the first fall in three years, according to figures released by the Society of Indian Auto Manufacturers, an industry body. India's car industry has struggled in recent months following many years of strong growth, forcing numerous manufacturers to shut down factories and trim output targets in the face of slowing customer demand. Maruti Suzuki, India's largest carmaker by sales, resumed production at its Manesar car factory close to New Delhi in mid-August, following a riot among workers which killed a senior manager and led to a month-long shutdown at the plant. The automaker's output halved in August compared with the same month last year, producing just 36,459 during the month, although overall national output for all manufacturers would have fallen even had Maruti produced at usual levels, Siam said. "The economic downturn is really hitting the industry," said Sugato Sen, senior director at Siam. Interest rates are still high and there is the threat of fuel price rises to come, so unless something is done in the external environment things will not pick up. India's car sales had been projected to grow at least 11 per cent this year, but Mr Sen said weak sales were now likely to lead his body to revise this figure downwards next month. "Looking at the numbers it is quite obvious that the final numbers will not be this high, given that car sales have grown only by 1 per cent so far this year," he said. Meanwhile, passenger vehicle sales in China rose 11 per cent in August year-on-year, in spite of the mainland economic slowdown which has sparked a price war and boosted inventories at dealerships. Passenger vehicle sales for the first eight months were up 8 per cent year-on-year to nearly 10m, the China Association of Automobile Manufacturers (CAAM) said on Monday. "We have seen quite a strong recovery in the market in the last few months," said Ivo Naumann of AlixPartners consultancy in Shanghai, who says he still expects 8 to 12 per cent growth in the market this year. "But there is a clear bifurcation between winners and losers in the market," he added, noting that most foreign automakers continue to take market share away from Chinese automakers who are suffering from excess capacity. China's car market - which grew 45 per cent in 2009 and 32 per cent in 2010 - has slowed dramatically since the end of tax incentives introduced as part of the government's 2008 stimulus package.