In a subdued auto market, Asian companies log growth in July (Roundup)

August 1st, 2012 - 9:01 pm ICT by IANS  

Chennai, Aug 1 (IANS) Even as the demand for automobiles remains subdued owing to high interest rates, rising fuel costs and uncertain economic conditions, Asian vehicle makers in general maintained their Indian growth story while their American counterparts were not so lucky in July.

Data released Wednesday by vehicle makers with Asian parentage, barring TVS Motor Company, logged sales growth while the two American car makers, Ford India and General Motors India, clocked negative offtake.

“The demand for automobiles is subdued due to factors like high interest rates and uncertain economic condition. The second quarter of current fiscal will be sluggish and the demand is expected to pick up in October/November,” Yaresh Kothari, research analyst at Angel Broking told IANS.

Voicing similar views P. Balendran, vice president, General Motors India, said: “The sales are not on the expected lines as the market continues to remain sluggish due to high interest rates, high fuel prices and various other factors. With market sentiments continuing to remain depressed, we are not expecting the market to show any improvement before the festival season.”

Passenger vehicle major Maruti Suzuki closed July with 9.2 percent sales growth as compared to sales logged during July 2011.

The company sold 82,234 units (domestic 71,024 units, exports 11,210 units) last month up from 75,300 units (domestic 66,504 units, exports 8,796 units) sold during July 2011.

Bangalore based Japanese-Indian joint venture Toyota Kirloskar Motor clocked seven percent sales growth last month powered by its utility vehicle models Innova and Fortuner.

Toyota Kirloskar said it sold 14,574 units last month, up from 13,592 units sold in July 2011.

“We have registered a growth this month based on the strength of Innova and Fortuner sales. The Innova and Fortuner sales continue to grow with the increase in production. There has been a drop in sales of the Etios series, as we exported 1,488 units to South Africa,” Sandeep Singh, deputy managing director (Marketing), was quoted as saying in the statement.

Similarly, Nissan Motor India, a subsidiary of Nissan Motor Company, Japan, declared that its July sales was 3,481 units, up from 1,593 units sold in July 2011.

“With this current sales growth trend, we are sure, will further expand with the launch of Evalia later this year helping us establish as a dominant player at the Indian marketplace,” said Ishida Takayuki, managing director.

Hyundai Motor India, the Indian subsidiary of South Korean auto major Hyundai Motor, last month logged 6.4 percent sales growth over the like month of 2011.

Hyundai Motor sold 52,845 units (domestic 27,585 units, exports 25,260 units), up from 49,666 units (domestic 25,642 units, exports 24,024 units) logged in July 2011.

“The overall market demand is suppressed due to general inflationary trend, high fuel prices and interest rates. Unless any major triggers get activated, market sentiment is not expected to improve very much,” Rakesh Srivastava, vice president (National Sales) at Hyundai Motor said.

India’s own Tata Motors logged 15 percent sales growth in July over the corresponding month in 2011.

It closed last month selling 73,491 units of commercial and passenger vehicles.

In the domestic market, the company sold 68,627 units last month up from 57,990 units sold in July last year.

Tata Motors sold 42,387 units of commercial vehicles in the domestic market as against 40,798 units sold in July last year.

However, in the medium and heavy commercial vehicles (M&HCV;) segment, it sold 12,786 units down from 15,836 units sold in July 2011.

Tata Motors passenger vehicle sales were at 26,240 units last month clocking an impressive 53 percent growth over 17,192 units sold in July 2011.

Mahindra & Mahindra, the other Indian company too closed July with 19 percent sales growth selling 47,059 units.

However, the company’s three-wheelers and commercial vehicles (operated by subsidiary Mahindra Navistar) logged negative sales for the period under review.

“Incidentally, July 2012 is the second-highest monthly sales for us. The auto industry needs to be concerned about slower economic expansion and consumer sentiments which are not so positive. A cut in interest rates would have helped lower the cost of manufacturing and product, thereby improving industry confidence,” said Pravin Shah, chief executive (automotive division).

In comparison, Ford Motor Company and General Motors logged negative growth last month.

Ford India sold 8,323 units (domestic 6,236 units, exports 2,087 units) last month against 10,696 units (domestic 7,504 units, exports 3,192 units) logged during July 2011.

“We believe the difficult market situation will ultimately recede in the long run and are confident of meeting the increased demand for cars in the festive period with our expanded capacity in engines,” said Michael Boneham, president and managing director, Ford India.

And General Motors sold 7,285 units last month as against 9,508 units in July 2011.

In the two-wheeler segment, Honda Motorcycle and Scooter India sold 239,094 units up from 152,382 units sold in July 2011.

On the other hand, India’s own TVS Motor reported a 28,707 unit-fall in sales last month as compared to the units sold during July 2011.

It said the company had logged a total sales of 161,255 (two-wheelers 157,954 units, three-wheelers 3,301 units) last month as against 189,962 units (two-wheelers 186,672 units, three-wheelers 3,290 units) registered in July 2011.

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