A woman walks past parked cars in Mumbai on Thursday. (AP)

New Delhi, Dec. 8: Car sales grew 7 per cent in November, but the industry expects sales for the whole fiscal to be the same as last year, a result of high interest rates, rising raw material costs and two major strikes in the country’s largest auto maker Maruti.

According to a report by the Society of Indian Automobile Manufacturers (Siam), car makers, who only eight months back cheered a 30 per cent annual rise in sales for 2010-11, have been hit by rising finance costs and increasing prices. Siam also said the situation at Maruti Suzuki India, the country’s top auto maker, had not stabilised and that had also affected the overall growth.

“We will revise our sales growth estimates downwards. The current estimate is 2-4 per cent. I don’t see that happening. We may just break even,” said Sugato Sen, senior director of Siam, adding that the revised outlook will be announced in January. Sales rose 7 per cent in November to 1,71,131 units against 1,59,939 units last year, Siam said, but total sales in the first eight months of the fiscal were down 3.5 per cent.

Higher prices of commodities such as steel, aluminium, plastic, rubber and fuel have pushed up costs. The rise in November sales, mainly because of a low comparison base, ended the four consecutive months of falling volumes that culminated in the biggest drop in over a decade in October.

“The base was low specifically for passenger cars, which created quantitative growth,” said Sen. “There is some revival in demand. But this is not enough to turn around the industry.”

The industry body has already cut its growth forecast twice this year, slashing it to 2-4 per cent in October from its initial forecast of 16-18 per cent.

December sales are typically lower than those seen in November, Sen said, adding that Siam expected sales to improve in the first few months of 2012. The market is driven by middle class buyers who mostly rely on bank financing for purchases. The Reserve Bank of India has raised interest rates 13 times since March 2010, driving up the cost of car loans.

Maruti last week said that November sales were down 18.5 per cent as it continued to bounce back from the months of labour unrest that crippled production and slashed its market share.

Maruti may see a fall in sales volumes over the fiscal year to March. “Maruti still has not stabilised,” said Sen. However, Tata Motors and Mahindra & Mahindra have seen rise in sales. Tata sales went up 41 per cent in November and M&M sales jumped 53 per cent, according to Siam.