AFTER a splendid run for most of last fiscal and in April, passenger car sales are decelerating as consumers apprehend a hike in petrol and diesel prices. With crude oil price hitting a record $133 per barrel and a fuel price hike looking imminent, Indian customers are postponing their car purchases. The biggest hit is the price-sensitive small-car segment, which accounts for 75% of the total sales. According to top dealers in the country, car sales in May could be 30% less than in April, when 98,740 units were sold. "While our inventories are all-time high, customers are staying away. Fuel is playing an important role as customers are wary of spiralling crude prices. Actual deliveries have reduced and only fuel-efficient cars like Alto, Swift and Dzire are in demand,' said a Maruti Suzuki dealer who requested anonymity. Sales have come down drastically after the vehicle prices saw a jump in May. Higher interest rates also played spoil sport. "It's not going to be a positive month. Sales are impacted in the price-sensitive small car segment, where fuelefficiency influences the buying decision,' GM vice-president (sales & marketing) Ankush Arora said. The fear of hike in fuel prices is generating demand for alternative fuels like CNG, LPG. Diesel vehicles, which are more fuel efficient than petrol cars, are also gaining demand as a price hike in diesel is widely expected to be much less than that in petrol. "Customers are making a beeline for vehicles offering lower running costs. Diesel vehicles, which are more fuel efficient than petrol cars, are becoming popular. For us the sales of Tavera UV and Optra Magnum remains consistent,' Mr Arora said. With no new launches scheduled in the next quarter, the slow drive in car sales is expected to continue for some time. The onset of the monsoon season and likely fuel price increases too are likely to keep buyers away for next three months. With continued rise in input prices like steel, aluminium and plastics putting pressures on margins, carmakers are unlikely to offer heavy discounts to accelerate sagging sales. "Its going to be a challenging fiscal and we are surely feeling the heat of rising inflation on the back of rising oil and steel prices which will impact demand. Adding to our problems are the interest rate increase due to strict monetary policy which will affect the entire automobile industry,' a senior Mahindra & Mahindra executive said. Of course, the scenario may change if the government goes in for a modest oil price hike. In such an event consumers who have postponed their purchase decision may go ahead and buy cars. chanchal.chauhan@timesgroup.com