The latest report of Society of Indian Automobile Manufacturers (SIAM) paints a grim picture for the besieged Indian automobile industry.

The report said that the sales of the car in country fell 7 per cent in December, the fifth drop in six months as inadequate finance and a slowing economy hollowed demand in the traditionally weak month. The report predicts that carmakers sold 82,105 units in the month, below the 88,272 sold a year ago.

As per the latest figures released by SIAM, the total vehicle sales in the domestic market stood at 597,622 units in December 2008 as against 730,603 units in the same month in 2007. The earlier month i.e. November 2008 also witnessed an overall sales declined by 17.98% at 711,281 units as against 867,243 units in the same month previous year.

Speaking on this, Sugato Sen, senior director, SIAM said, “The decline in two wheelers and passenger vehicles is because of finance and sentiment.”

“Finance costs have not come down. If that becomes more congenial, people will start buying,” Mr. Sen added.

The decline in sales was led by the under pressure commercial vehicles (CV) segment, which witnessed a decline of 58.28% at 17,920 units in December 2008 as against 42,961 units in the corresponding month the previous year.

Commenting over this, Sen said, “The previous worst ever sales in the CV segment was in July 1997, which witnessed a decline of 51.76%.”

Besides this, motorcycle sales, during the month, were down by 22.9% at 335,820 units, against 435,925 units in the year-ago period.

Total two-wheeler sales in December also declined by 15.4% at over 461,302 units compared with 545,485 units in the same month previous year.