Country's largest automobile company Tata Motors today said industry would grow at modest pace only in the second quarter of this fiscal owing to rising lending rates and fuel costs.
"We think overall automobile industry's growth will again remain in single digit in the second quarter of this fiscal as it was in the first quarter of this fiscal," Tata Motors Head, Car Product Group, Nitin Seth told reporters here today.
In the first fiscal of 2008-09, the automobile growth remained 7-8 per cent, a sharp fall from 17 per cent in the corresponding period of last fiscal.
"Indian auto industry declined from 26 per cent in the first quarter of 2006-07 to 17 per cent in the same period in 2007-08 and now it has gone down to 7-8 per cent on account of increasing lending rates and fuel cost," he said.
Tata Motors registered 5 per cent growth in the first quarter of this fiscal, he said.
"There is no doubt that current conditions have impacted the industry's growth," he asserted.
Describing the ongoing phase for the auto industry as tough, he said, "People are postponing their purchases as the cost of buying has shot up considerably during last couple of months due to steps taken by the government to rein in the inflation."
