Tokyo: Sales at Maruti Suzuki India declined 8.8 percent to 80,298 vehicles in June. This was the first fall since December 2008 and pushed its shares down as much as 2.6 percent.
Production at Maruti, 54.2 percent owned by Japan’s Suzuki Motor, was hurt by a strike last month that led to a production loss of about 16,000 cars.
In total, Indian automakers sold 158,817 vehicles in May, up 7 percent in what was the slowest pace of growth in two years.
Production at Maruti was hurt by a strike last month. Mukesh Gupta/Reuters
Analysts expect a further slowdown as rising fuel prices, interest rates and vehicle prices crimp demand. India raised diesel and petrol prices by about 9 percent in the past two months.
“There will certainly be a shift from cars to two wheelers for the middle class who are looking to buy low-end cars, because they can save on costs,” said Kishor Oswal, chairman at brokerage CNI Research.
India’s third-largest two-wheeler maker, TVS Motor Co, reported a 14 percent rise in June sales to 182,456.
Sales at Tata Motors, India’s largest maker of trucks and buses, fell 1 percent to 66,358.
Sales of its Tata Nano, touted as the world’s cheapest car with its lowest priced variant costing 151,907 rupees ($3,398), plunged 29 percent.
Hyundia, Kia on the roll
Hyundai and Kia extended their industry-beating march after sales accelerated in the past few months as quake-hit Japanese rivals suffered from a dearth of products.
The duo, which ranks fifth in global car sales, are expected to report healthy sales and earnings in the second half, but would need to manage investors’ expectations in the face of a weakening global economy, analysts said.
“The slowing global economy may deal a blow to consumer sentiment. But there is pent-up demand for cars in the United States after the market collapsed in the wake of the global financial crisis,” said Yoon Phil-joong, an analyst at Samsung Securities.
“Consumers also place value on practicality during difficult economic times. Korean car makers are relatively safe,” he said.
Hyundai’s global sales rose 12.3 percent to a monthly record in June, helped by strong sales in the United States, China, India and South Korea. Kia’s sales surged 22 percent.
Reuters
