India’s car makers post lacklustre sales in May

MUMBAI — India’s top auto makers Friday reported lacklustre sales in May as high taxes and rising fuel prices produced more downbeat data on the national economy.

By (AFP)

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Published: Fri 1 Jun 2012, 8:04 PM

Last updated: Tue 7 Apr 2015, 12:23 PM

Maruti Suzuki, Ford and General Motors posted a fall in sales by their Indian operations, while Tata Motors sales edged up marginally.

The weak figures came after official data released Thursday for the January-March quarter showed that India’s economy grew at its slowest pace in nearly a decade.

Maruti Suzuki India, majority-owned by Japan’s Suzuki Motor Corp, said passenger car sales fell 5.0 percent year-on-year at 98,884 vehicles, snapping four straight months of gains, after demand had slowed last year.

Maruti’s small cars — the M800, Alto, A-star and WagonR — and the mid-sized SX4, all showed lower sales.

Ford India sold 6,036 units in May, down 14 percent year-on-year, in what it said were “increasingly challenging market conditions”.

Tata Motors’ car sales rose to 20,503 vehicles, a growth of just six percent on last year.

General Motors local unit sales declined 27 percent to 6,079 vehicles.

South Korean giant Hyundai Motor’s local subsidiary, the second-largest carmaker in India, said sales rose 17 percent to 55,670 units.

“The recent hike in petrol prices has depressed market sentiment. With the macro-economic indicators providing no cause for cheer, the demand outlook does not look very bright,” said Hyundai Motor India’s director (marketing and sales) Arvind Saxena.

Maruti sales are also slowing as its portfolio of cars — mainly petrol versions — are not selling as fast as diesel-powered cars in India.

A big portion of India’s car market is held by diesel cars, whose fuel is still heavily subsidised by the government and is about 40 percent cheaper than petrol.

Last week Indian state-run oil firms announced the sharpest jump in petrol prices in nearly a decade to offset growing losses caused by subsidised rates.

“(May) auto sales data is weak. We are seeing a overhang of the government excise duties hike..the industry has still to overcome this,” said Mahantesh Sabarad, auto analyst with Mumbai’s Fortune Equity Brokers.

India, which has been one of the world’s fastest-growing car markets in recent years, suffered a slowdown in demand in 2011 as many buyers decided to defer purchases due to costly loans and rising fuel expenses.

Analysts have forecast car sales in India will improve in the coming months after the central Reserve Bank of India lowered interest rates by a sharper-than-expected 50 basis points in April.

The Society of Automobile Manufacturers forecasts car sales will grow 10-12 percent in the new financial year, which ends March 2013.

The broader trend shows that demand for cars is slowing, rising just 2.19 percent for the full year to March, well down from 29 percent in the previous fiscal year.

Car ownership remains low in India, where hundreds of millions live below the poverty line, but an expanding economy is minting millions of new middle-class families and millionaires each year.


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