Car sales have been slowing in India due to higher costs
INDIA’S biggest auto maker Maruti Suzuki has said that its monthly sales for December fell 7.1 per cent year-on-year, further eroding its market share as rivals reported gains.
The company, which is majority-owned by Japan`s Suzuki Motor Corp, said it sold 92,161 cars last month, down from 99,225 in the same period in 2010.
The figure represents the seventh straight year-on-year monthly fall in car sales for Maruti, which has been dogged by a series of crippling labour disputes at one of its plants in the northern Indian state of Haryana.
In October, Maruti sales slumped more than half from their level the previous year - its worst monthly figures in a decade.
The disputes erupted as Maruti battled to boost its market share, which has shrunk in the past four years from 55 per cent to 38 per cent, as other global auto giants seek a foothold in India`s vehicle market.
Prices have risen on the back of steeper commodity prices and 13 interest rate hikes by the central bank since March 2010 to tame near double-digit inflation, analysts say.
Unlike strike-hit Maruti, rival car makers are starting to see an improvement in the pace of growth in sales.
Ford said it sold 5,979 units in December - a 39 per cent increase year-on-year - while Tata Motors reported a 22 per cent increase in total vehicles to 82,278 units.
General Motors` India unit said sales edged up 7.0 per cent, Nissan India reported a rise of 44 per cent, while South Korean giant Hyundai Motor`s local subsidiary said sales increased 13 per cent.
Over 80 per cent of sales in India in 2011 were for diesel rather than petrol cars, as consumers opted for the cheaper fuel which is still subsidised by the government.
Analysts are expecting car sales to improve in coming months.
"The micro factors are improving... interest rates are on hold, production constraints (for Maruti) are over and the industry has a strong backlog of orders to complete," Mahantesh Sabarad from Fortune Equity Brokers said.
Auto manufacturers are gearing up to showcase new cars and future designs at the Auto Expo 2012, which begins in New Delhi on Thursday (January 5).
Maruti is expected to launch a new multi-purpose vehicle and display a new concept compact vehicle, while Hyundai said it would showcase a multi-utility vehicle, a three-door utility coupe and a premium sedan.
India`s motorbike giant Bajaj Auto, which last year abandoned plans for an ultra-low-cost small car to challenge Tata`s Nano, may launch an entry-level passenger carrier at the show, media reports said.
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