New Delhi: Automobile industry body SIAM on Monday lowered its vehicle sales growth forecast for FY'12 to 11-13 per cent from 12-15 per cent announced three months earlier, mainly due to higher interest rates and rising fuel prices.

The Society of Indian Automobile Manufacturers (SIAM) also predicted a lower growth of 10-12 per cent during 2011-12, as against 16-18 per cent announced earlier.

It, however, said India became the top growing passenger car market in the world during the January-June period this year, overtaking the US, which grew at 14.40 per cent.

"Increase in interest rates has been higher than what we had thought three months earlier... Fuel price rise is more than what we had anticipated," SIAM President Pawan Goenka told reporters here.

He, however, said commodity prices, which are another big concern for the auto industry, have started softening in recent months and hence, it is unlikely that any company will raise the prices of their products.

"We are sitting at a threshold where if interest rates go up further, it will have a devastating impact on the industry. The three biggest concerns at present for the industry are lower general sentiment due to lower GDP forecast and various scams, higher finance rates and increasing fuel prices," Goenka said.

In the first quarter, two leading car-makers, Maruti Suzuki and Tata Motors, did not experience good growth, he said, adding, "The rest of the quarters of this fiscal depend on how Maruti Suzuki and Tata Motors perform."

Labour unrest, which had completely stopped production at Maruti Suzuki's Manesar plant for 13 days, is another major concern for the auto industry of the country, he added.

Stressing that the industry will grow at a double-digit rate, Goenka said: "Our revised forecast is now 11-13 per cent for the entire auto sector. Both the passenger car and passenger vehicles segments have been projected to grow at a lower rate 10-12 per cent in FY'12."

With expectations of a good monsoon season and arrival of the festive season, sales in the passenger vehicle segment are likely to pick up again at the end of this quarter, he added.

There were 13 new launches in the both the passenger vehicles and two-wheeler segments last quarter. Besides, the passenger vehicle and two-wheeler industries both saw three vehicles being refreshed to suit consumer tastes, Goenka said.

Dwelling on the forecast, SIAM said the growth projection for the two-wheeler segment has been unchanged, while that of the three-wheeler segment has been lowered to 8-10 per cent from 9-11 per cent.

Utility vehicle sales will surge by 10-12 per cent compared to 12-14 per cent announced earlier, he said.

Goenka said the commercial vehicle segment is likely to witness slower growth of 12-14 per cent than the earlier projection of 14-16 per cent.

While sales in the light commercial vehicles segment are now estimated to increase by 17-19 per cent, instead of the earlier forecast of 18-21 per cent, medium and heavy commercial vehicle sales are expected to be up by only 8-10 per cent, as against 10-12 per cent, he added.

Talking about India's performance compared to other global markets, Goenka said: "In passenger vehicles, India was the fastest growing market at 18.20 per cent in the first six months of 2011. However, it was at the fifth position with 12.70 per cent in the commercial vehicles category."

In the passenger vehicles category, the US was the second fastest growing market in the world, with a 14.40 per cent jump in sales.

Germany, China and Brazil followed the list with a 14.30 per cent, 11 per cent and 8.30 per cent increase in sales, respectively.

In the commercial vehicles segment, Germany was the fastest growing country, with sales rising by 28.20 per cent year-on-year, followed by the UK, Brazil and the US, which experienced sales growth of 26.30 per cent, 18.70 per cent and 13.70 per cent, respectively, Goenka said.