New Delhi: Acknowledging that hardening interest rates have affected the automobile sector and are a cause for concern, Heavy Industries Minister Praful Patel on Wednesday expressed hope that the slowdown in domestic sales is a temporary phenomenon.
"There is a cause of concern due to interest rates hardening. This certainly has affected the auto sector. But we hope that this is a short-term phenomenon and it may improve as other economic indicators improve," Patel said.
He was talking to reporters on the sidelines of the Society of Indian Automobile Manufacturers' (SIAM) annual summit here.
The auto industry started slowing down this fiscal, with the passenger car segment growing by only 7 per cent in May.

In June, cars sales saw their slowest growth rate in 27 months, registering just a 1.62 per cent increase year-on-year.
In July, domestic passenger car sales fell for the first time after 30 months of continuous growth, declining by 15.76 per cent year-on-year.
The decline was mainly due to the increase in interest rates and hikes in fuel prices in recent months.
The Reserve Bank of India has already hiked interest rates 11 times since March, 2010, to tame demand and curb inflation. It will announce its next mid-quarterly policy review on September 16.
Headline inflation stood at 9.44 per cent in July.
Patel said inflation has to be curbed and other fiscal measures have to be taken.

Also, the entire world economy is in a slowdown mode, so it has its own ramifications on the country's economy.
Petrol prices have risen by 21 per cent since they were freed from government control in June last year. The price of petrol in Delhi has risen to Rs 63.70 a litre now from Rs 51.43 a litre when the government decontrolled the fuel on
June 26, 2010.
Besides, the government hiked diesel price by Rs 3 to Rs 41.21 per litre in June this year.