New Delhi: The domestic automobile industry's growth trajectory has taken a downward curve. This trend comes after seven years of successive growth in this sector. The decline is attributed to the fact that high interest rates and availability of finance weaned many consumers away from vehicle purchasing in the financial year ended 2007-08.

Production of vehicles in FY 2007-08 plummeted mainly due to declining motorcycle and three-wheeler sales in the country, said the Society of Indian Automobile Manufacturers (SIAM) on Thursday, while releasing the annual and monthly-March sales for the industry.

In the financial year ended in March, domestic vehicle sales fell by 4.70 percent, with motorcycles sales reported a sharp fall of 11.90 percent to 57,68,341 units from 65,47,195 units. Lack of implementation of control on overloading along with issue of financing dragged sales of medium and heavy commercial vehicles by 1.66 percent to 2,70,994 units as compared to the previous year. "The decline in sales has been mainly due to availability of finance, issue of repossessing vehicles and high interest rates which have led to lower sales" said Dilip Chenoy,Director General, SIAM. "Availability of finance is a bigger issue than interest rates. If the first time borrowers are taken care of, then it could spell growth for the industry," he said.

Among passenger car companies, Hyundai Motor India recorded the highest growth at 29,396 units in March, an increase of 52 percent. Maruti Suzuki, reported almost flat sales at 55,758 units. During the month, both scooters and motorcycles reported a decrease in sales volumes. The scooters segment fell 5.07 percent to 83, 022 units and the motorcycles to 5,06,884 units, a decrease of 0.04 percent.