The Indian auto industry's hopes of cashing in on the festive season were dashed by severe liquidity crunch and high financing costs, with total vehicle sales in domestic market dipping by 14.42% in October.

The industry, which witnessed a total vehicle sales of 865,404 units as against 1,011,221 units in October last year, was dragged down by poor passenger cars, motorcycles and commercial vehicles sales.

According to the Society of Indian Automobile Manufacturers (SIAM), domestic passenger car sales went reversed gear in October with a 6.59% fall at 98,900 units as against 105,877 units in the same month last year. Motorcycles sales were at 538,353 units as against 657,874 units last year, down by 18.17%, while that of commercial vehicles were down by 35.95% to 28,027 units during the month from 43,756 units in the year-ago period.

"Whatever steps that were taken up by the government and the RBI to ease liquidity crunch are not sufficient. They have been used up to correct existing problems in the system and it had not trickled down to the auto industry," SIAM director general, Mr Dilip Chenoy said.

He said October sales were so bad that it had pulled down the cumulative sales growth of the fiscal to 5.64% (in April-October) from 10.07% (in April-September period).

"Financing is still a big issue for the auto industry and we are keeping a watch till the end of this month to forecast what growth the industry can achieve this fiscal," Chenoy said, adding for the passenger cars sustaining even a single digit growth would be a challenge.

Earlier this year, SIAM had projected an overall sales growth of 12-15%, which was revised to 8-10% in September.

During October, sales of car market leader Maruti Suzuki India declined by 6.42% to 52,153 units, compared with 55,731 units in the same month last year, SIAM said.

Hyundai Motor India Ltd, on the other hand, riding on the back of its new hatchback 'i10', managed a growth of 9.91% at 20,001 units, against 18,197 units a year ago.

Tata Motors was also able to marginally push the sales northward at 14,100 units, while the same stood at 14,006 units in October last year. General Motors sales also increased by 25.33% to 5,477 units from 4,370 units last year.