India’s car industry has seen its slowest growth in two years. Due to high fuel prices, interest rates and vehicle cost, less people are buying vehicles is the world’s second-fastest growing vehicle market.

By May 2011, prices for fuel have rose by 8.6%. India is also battling with high inflation. In order to deal this problem, India’s banks have raised interest rates nine times since March of last year. They are expected to rise again this month.

Sales in China are also expected to slow down after the government stripped away its incentive policies at the end of 2010.

The India Market has expressed their worries about the rising cost of prices. Tata Motors gained a 10% rise in sales during the month of May, due to the 84% increase in sales of the Nano, which is considered to be the world’s cheapest car.

“Sachin Gupta and Chetan Vora, analysts at Mumbai-based Edelweiss Securities Ltd., stated: "We expect cars and commercial vehicles to be the worst affected, since their sales are highly dependent on bank funding and susceptible to rises in interest rates and inflation."