New Delhi, Jan. 12: Auto sales skidded 18.2 per cent in December 2008 because of low demand for trucks and buses whose sales plunged 58 per cent.

Passenger car sales fell 7 per cent against the market expectation of 15 per cent. According to car makers, high interest rates and the postponement of big-ticket purchases led to the decline in sales.

A fall in the sales of commercial vehicles — which dipped 58.28 per cent to 17,920 units in December 2008 from 42,961 a year ago — came as a massive blow to the industry.

According to data released by the Society of Indian Automobile Manufacturers (Siam), this is the worst sales performance by the commercial vehicle segment in the last 11 years. “The previous worst-ever sales in this segment was in July 1997, which witnessed a decline of 51.76 per cent,” said Sugato Sen, senior director of Siam.

He said the government’s stimulus package for the auto industry had not yielded the desired results and 2009 was going to be a tougher year.

Heavy and medium commercial vehicles sales plunged 71.1 per cent to 6,914 units from 23,996 a year ago. Light vehicle sales dropped 41.9 per cent to 11,006 units from 18,965 units in the same month of the previous year.

“The second fiscal package was not enough to revive the sector. We need more stimulus for the infrastructure sector. It will help spur demand for commercial vehicles,” said Vinod Dasari, COO of Ashok Leyland.

“A meltdown in the financial markets, the slowdown in infrastructure projects and higher interest rates have crippled growth. I do not see the situation improving in the next couple of months,” said a senior official of Mahindra & Mahindra.

Motorcycle sales were down 22.9 per cent to 3,35,820 units in December from 4,35,925 in the year-ago period, while total two-wheeler sales dropped 15.4 per cent to 4,61,302 units from 5,45,485 in the year-ago month.

According to Siam, total vehicle sales in the domestic market stood at 5,97,622 in December against 7,30,603 in the same month in 2007.