Slowing economic growth, high fuel prices and interest rates forced industry body Society of Indian Automobile Manufacturers (SIAM) to slash growth forecast of auto sales in the domestic market for the second time in four months.

SIAM on Wednesday slashed its car sales growth forecast for the fiscal year of 2012-13 to 1-3 per cent, from its own July forecast of 9-11 per cent. It also lowered growth forecast for two-wheelers sales from its earlier forecast of 11-13 per cent to 5-7 per cent.

The industry body held economic slowdown and high fuel prices and interest rates responsible for the poor customer sentiment.

Speaking on the topic, SIAM President S Sandilya said, "Inflation is not under control and the cost of vehicle ownership is high. Economic growth is also not encouraging."

Overall sales of passenger vehicles, which include both cars and sports utility vehicles, have been estimated to grow at a rate of 8-10 per cent in the current fiscal year, as compared with earlier estimate of 11-13 per cent. Most of the growth in sales is expected to come from diesel-driven sports utility vehicles.

In the April to September quarter, car sales suffered a declined of 0.3 per cent to 9.09 lakh units, as compared with 9.12 lakh units in the corresponding period of previous fiscal. Moped and motorcycle sales slipped 10.36 per cent and 18.85 per cent respectively in September over the same month of previous year.

Overall auto sales slipped 5.96 per cent during April to September this year.

However, SIAM is optimistic that sales of cars will pick up in the final three months of this fiscal year.