MUMBAI, India — India's auto sector skidded into deeper trouble in January, with domestic vehicle sales falling 7.4 per cent from a year ago to 768,622 units as tight credit and slowing growth dampened demand, an industry body said Monday.
While sales of passenger vehicles fell 6.9 per cent, those of commercial vehicles - trucks, buses and other large vehicles - tumbled a stunning 51 per cent from a year earlier, the Society of Indian Automobile Manufacturers said. That's dealt a big blow to Tata Motors, the country's largest commercial vehicle maker.
Until recently, India's automotive sector had enjoyed years of double digit growth, drawing foreign automakers like General Motors Corp., Ford Motor Co., Hyundai Motor Co. and Suzuki Motor Corp., who hoped sales in India's small but fast-growing market could help offset waning growth elsewhere.
The dismal numbers come after five months of aggressive interest rate cuts by India's central bank. Other recent stimulus measures, such tax cuts - which automakers quickly passed on to consumers - and a pay raise and back pay disbursements for thousands of Indian civil servants have also failed to quickly reinvigorate the auto market.
"The shrinkage is only a temporary phenomenon," said Dilip Chenoy, the director general of the group. He predicted growth will rebound once banks pass on lower interest rates to consumers and government plans to ease credit for commercial vehicle purchases and buy buses take effect.
Exports of passenger vehicles have been the sole bright spot for automakers in India. They rose 8.5 per cent in January to 21,616, while from April through January they surged 59.55 per cent, to 275,674, the group said.
Chenoy said the outlook for exports was positive because automakers like Hyundai use India as a global hub for small vehicle production.
Meanwhile, domestic sales of commercial vehicles in the 10 months through January slid 19.8 per cent, to 311,283, and exports fell 18.99 per cent, to 37,808 vehicles, the group said.
That's hit Tata Motors, India's largest commercial vehicle manufacturer, especially hard, with domestic sales in January down 30 per cent to 35,704 vehicles.
Last week, the company, which is struggling to refinance the remaining $2 billion of a $3 billion loan it took to purchase Jaguar and Land Rover from Ford Motor Co. in June, said it has been forced to delay some payments to vendors.
Tata's chief executive Ravi Kant told reporters earlier this month that "the magnitude and pace" of the slowdown in the auto market was unexpected and that the company was trying to cope as best it could.
Maruti Suzuki, India's largest automaker, said its domestic sales rose 5.6 per cent in January to 67,005 vehicles.
But other major makers saw domestic sales decline.
Hyundai Motor India Ltd., India's largest passenger car exporter, said domestic sales dropped 13.5 per cent in January, to 21,016 vehicles, even as exports grew by 20.9 per cent, to 16,200 vehicles.
Domestic sales at Mahindra & Mahindra, another large Indian automaker, slid 17.1 per cent in January, to 17,320 vehicles.
Source: http://www.google.com/hostednews/canadianpress/article/ALeqM5icMGjMKU-_jo9KoFxOBoMGzJ0ICg
While sales of passenger vehicles fell 6.9 per cent, those of commercial vehicles - trucks, buses and other large vehicles - tumbled a stunning 51 per cent from a year earlier, the Society of Indian Automobile Manufacturers said. That's dealt a big blow to Tata Motors, the country's largest commercial vehicle maker.
Until recently, India's automotive sector had enjoyed years of double digit growth, drawing foreign automakers like General Motors Corp., Ford Motor Co., Hyundai Motor Co. and Suzuki Motor Corp., who hoped sales in India's small but fast-growing market could help offset waning growth elsewhere.
The dismal numbers come after five months of aggressive interest rate cuts by India's central bank. Other recent stimulus measures, such tax cuts - which automakers quickly passed on to consumers - and a pay raise and back pay disbursements for thousands of Indian civil servants have also failed to quickly reinvigorate the auto market.
"The shrinkage is only a temporary phenomenon," said Dilip Chenoy, the director general of the group. He predicted growth will rebound once banks pass on lower interest rates to consumers and government plans to ease credit for commercial vehicle purchases and buy buses take effect.
Exports of passenger vehicles have been the sole bright spot for automakers in India. They rose 8.5 per cent in January to 21,616, while from April through January they surged 59.55 per cent, to 275,674, the group said.
Chenoy said the outlook for exports was positive because automakers like Hyundai use India as a global hub for small vehicle production.
Meanwhile, domestic sales of commercial vehicles in the 10 months through January slid 19.8 per cent, to 311,283, and exports fell 18.99 per cent, to 37,808 vehicles, the group said.
That's hit Tata Motors, India's largest commercial vehicle manufacturer, especially hard, with domestic sales in January down 30 per cent to 35,704 vehicles.
Last week, the company, which is struggling to refinance the remaining $2 billion of a $3 billion loan it took to purchase Jaguar and Land Rover from Ford Motor Co. in June, said it has been forced to delay some payments to vendors.
Tata's chief executive Ravi Kant told reporters earlier this month that "the magnitude and pace" of the slowdown in the auto market was unexpected and that the company was trying to cope as best it could.
Maruti Suzuki, India's largest automaker, said its domestic sales rose 5.6 per cent in January to 67,005 vehicles.
But other major makers saw domestic sales decline.
Hyundai Motor India Ltd., India's largest passenger car exporter, said domestic sales dropped 13.5 per cent in January, to 21,016 vehicles, even as exports grew by 20.9 per cent, to 16,200 vehicles.
Domestic sales at Mahindra & Mahindra, another large Indian automaker, slid 17.1 per cent in January, to 17,320 vehicles.
Source: http://www.google.com/hostednews/canadianpress/article/ALeqM5icMGjMKU-_jo9KoFxOBoMGzJ0ICg
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