Sales of autombile products in the domestic market continued to grow despite price hikes announced by a slew of automakers in the first month of the calendar year. However, the rate of growth declined to 18.69% in January at 13.2 lakh units against 11.14 lakh units in the same month last year, as per data from Siam. Last year automobile sales grew 25% plus.

Overall domestic car sales in January stood at 1,84,332 units – an increase of 26.28% over last year. This was the highest ever monthly sales. The previous best was in October last year. In January, the total car sales stood at 1,45,971 units.

Two-wheeler sales, however, grew at 17.55% to 9,80,752 units from 8,34,343 units in January, 2010. Commercial vehicle sales during the month jumped 15.5% at 60,753 units as compared to 53,963 units last year.

The country?s largest carmaker Maruti Suzuki grew 26% at 86,285 units. Its closest rival Hyundai Motor India posted a flat growth of a little over 2% to 30,301 units. Buoyed by the increased sales of the Nano, Tata Motors closed the gap with Hyundai in January growing at 13.5% at 25,750 units.

Overall motorycle sales grew 15% at 7,47,818 units as against 6,50,633 units in January 2010. The growth was spearheaded by Hero Honda which grew 15.7% at 4,23,434 units. Bajaj Auto during the month grew over 7% to 1,92,026 units. TVS Motors’ sales increased 28% at 50,560 units. Japanese subsidiary firm Honda Motorcycle & Scooter India (HMSI) saw its sales jump 21.3% to 48,732 units during the month.

Despite the high sales growth, issues arising out of rising raw material costs and interest rates still continue to pose a grave risk for the industry. President of Siam Pawan Goenka has pegged the growth in 2011 to be around 14-15% ? a sharp fall from the previous year. He said that as part of the auto body?s budgetary proposals, Siam had urged the finance ministry not to roll back the excise duty to 12% from the current 10%.

Though he ruled out any adverse impact on sales owing to a hike in excise duty alone, he said if interest rates and raw material costs also increased, the combination of the three factors could be ?disastrous? for the industry.

In just 12 months, prices of key inputs like copper, aluminium and rubber has shot up over 50%.