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UPDATE 1-India FY13 car sales growth f'cast slashed to 1-3 pct

* Industry body cuts FY13 car sales growth to just 1-3 pct

* High interest rates, slowing GDP growth weighs

* Motorcycle sales f'cast cut to 5-7 pct, commercialvehicles to 3-5 pct

* Sept car sales slide 5.4 pct, second straight monthly fall

(Adds quotes, industry comment and data details)

By Anurag Kotoky

NEW DELHI, Oct 10 (Reuters) - India's car sales are seengrowing just 1 percent to 3 percent in the current financialyear, an industry body said, slashing its previous estimates ashigh interest rates and slowing economic growth continue tostifle a once-booming industry.

Production cuts and temporary plant shutdowns have marked atorrid 2012 for India's auto industry, a key market for globalautomakers hungry for growth, and compounded fears of aneconomic slowdown in Asia's third-largest economy.

"Slowdown in economic growth and hence subdued rise inincome, along with rising cost of ownership will furtherdecelerate growth," said S. Sandilya, president of the Societyof Indian Automobile Manufacturers.

"This trend is likely to continue for some time until theeconomy comes back on track."

Car sales in India grew more than 20 percent in the fiscalyear that ended in March 2011, attracting billions of dollars ininvestment from global automakers.

"The earlier figure of around 10 percent will not bepossible, it was too high," R.C. Bhargava, chairman of MarutiSuzuki , India's biggest car maker, told Reuters.

"But 1 to 3 percent is a little on the low side. I don'tthink that the situation is that bad," Bhargava said, addingthat he expected sales to grow 5 percent to 6 percent.

Sales in India fell 5.4 percent in September, the secondconsecutive monthly slide, according to data released by SIAMearlier on Wednesday. SIAM had already cut its initial estimateof 10 percent to 12 percent growth to 9 percent to 11 percent.

SIAM also cut its motorcycle sales growth estimate for theyear to 5 percent to 7 percent, from 11 percent to 13 percentpreviously. Commercial vehicle sales are seen growing 3 percentto 5 percent, SIAM said, down from 6 percent to 8 percent.

India's automotive industry could miss a 2016 target of $160billion turnover by about $30 billion if the current trendscontinue, Sandilya added.

A hike in the price of subsidised diesel in September pushedup ownership costs and forced almost all of the country'sautomakers to increase the price of their vehicles due toincreased freight costs, further dampening demand.

Car makers have said that they expect sales to pick upduring India's festival season in October and November, whenpeople typically choose to make big-ticket purchases.

(Writing and additional reporting by Henry Foy in MUMBAI;Editing by Muralikumar Anantharaman)

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Keywords: INDIA AUTOS/