Car makers say Feb sales fall; high costs, economy weigh

MUMBAI Fri Mar 1, 2013 7:13pm IST

Stocks

   

MUMBAI (Reuters) - Top car makers reported falling sales in February as high costs and sluggish economic growth continued to weigh on demand, threatening to result in the industry's first decline in annual sales in a decade.

Car sales during the first 10 months of the current financial year that ends on March 31, were down 1.8 percent compared to the same period last year, according to the Society of Indian Automobile Manufacturers (SIAM).

Over the past few years, billions of dollars of investment has poured into the industry from the world's biggest car makers, hungry for growth. Sales grew a record 30 percent in the year to March 2011 and annual sales have grown every year since the financial year that ended in March 2003, according to data from SIAM.

Indian car makers have been hit by high interest rates and rising fuel costs. They had hoped incentives to boost the industry would be announced in the country's budget yesterday, but instead saw taxes rise on some sports utility vehicles (SUVs), risking growth in the market's only bright spot.

Maruti Suzuki India Ltd (MRTI.NS), India's biggest car maker, said its car sales fell 10.9 percent in February. Hyundai Motor Corp's Indian unit, the country's No.2, said its domestic sales dropped 7.6 percent during the month.

Tata Motors, the country's third-largest car maker, said its February sales were down 33 percent. Combined, the three companies account for 75 percent of the car market.

"It should definitely end the year negative" said Joseph George, auto analyst at IIFL in Mumbai.

Ford Motor Co's (F.N) Indian unit said its domestic sales fell 44 percent in February.

GRAPHIC: Indian car sales, click link.reuters.com/tyc46t

Mahindra & Mahindra Ltd (MAHM.NS), whose growth in sales of SUVs has been one of the industry's fastest, said its overall domestic sales rose 10 percent in February, but its SUVs are not included in car sales data compiled by SIAM.

(Reporting by Henry Foy; Editing by Elaine Hardcastle)

Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

REUTERS SHOWCASE

Diwali Sales

Diwali Sales

Gold sales jump about 20 pct for Diwali - trade body  Full Article 

World Bank Rival

World Bank Rival

Three major nations absent as China launches W.Bank rival in Asia  Full Article 

Wal-Mart India

Wal-Mart India

Murali Lanka appointed as Wal-Mart India operations chief  Full Article 

Microsoft Earnings

Microsoft Earnings

Microsoft sales beat Street hopes, cloud profits up.  Full Article 

Special Report

Special Report

Why Madrid's poor fear Goldman Sachs and Blackstone  Full Article 

U.S. Economy

U.S. Economy

Spectre of no-inflation world looms over Fed's return to normal  Full Article 

Insider Trading

Insider Trading

Rengan Rajaratnam, SEC to settle civil insider trading charge.  Full Article 

Market Watch

Market Watch

Betting on the beaten up? Investors pin hopes on stocks in Europe, Japan.  Full Article 

India Insight

India Insight

Kalki Koechlin on her role as a disabled girl in “Margarita, With a Straw”  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage