China and India have both posted significant declines in year-on-year car sales figures for August, according to official data released this week.

China, the world's second biggest automarket, saw a total of 451,300 cars sold last month according to the China Association of Automobile Manufacturers - a fall of 6.24 per cent from 12 months ago.

The figure - which represents the first monthly decrease in over two years - is being attributed to a combination of the Beijing Olympics, a slowing economy and the 20 per cent hike in gasoline and diesel prices in late June.

The news appears to corroborate the view of Rao Da, Secretary-General of the China Passenger Car Association, who claimed in a recent report that the country's era of 20 per cent-plus annual sales growth could be over.

Meanwhile, year-on-year car sales in India fell by 4.4 per cent during August as the increased cost of borrowing and higher prices took their toll on buyers.

The Society of Indian Automobile Manufacturers (SIAM) confirmed the second successive month of annual declines for the country, with sales falling to 94,584, compared to the 98,893 recorded 12 months earlier.

Sales volumes have also now fallen every month since April, while the annual decline of 1.7 per cent in July was the first such decrease for three years.

The trend is being blamed on a number of factors, such as the central bank raising its key lending rate to nine per cent - the highest level since 2001 - as inflation broke through the ten per cent barrier.

In addition, automakers have been forced to withdraw customer-orientated discounts and incentives as their budgets became increasingly squeezed by rising raw material costs.



Source:
UPDATE-India's Aug car sales fall 2nd month, down 4.4 pct (11/09/08)
http://www.reuters.com/article/rbssConsumerGoodsAndRetailNews/idUSDEL35201420080911
UPDATE 1-China car sales fall 6.24 pct yr/yr in August (08/09/08)
http://www.reuters.com/article/economicNews/idUSSHA26854220080908?sp=true