-- Hyundai sales drop; Ford, Honda, Mahindra Rise
-- Analyst says prospects for 2013 look brighter
(Adds sales data from Honda, Mahindra, Toyota, Hero MotoCorp,
analyst's comments, background, context)
By Santanu Choudhury
NEW DELHI--Several of India's car makers Tuesday reported a drop
or a modest increase in sales for December, despite year-end
discounts and the recent introduction of new models.
The Indian units of South Korea's Hyundai Motor Co. (005380.SE)
and Toyota Motor Corp. (TM) said their sales fell in December,
while Mahindra & Mahindra Ltd. (500520.BY) recorded growth of
less than 6%.
Analysts said also that the two companies which reported large
increases -- Ford India Pvt. Ltd. and Honda Cars India Ltd. -- have
a pretty small share of the market.
They added that it is difficult to call a trend right away
because market leader Maruti Suzuki India Ltd. (532500.BY) and
third-ranked Tata Motors Ltd. (500570.BY) are yet to release their
sales figures.
Hyundai Motor India Ltd. -- the country's second-largest car
maker -- said its sales in December fell 2.5% from a year earlier
to 47,833 cars. Local sales declined 9.6% to 26,697 autos, but
exports grew 8.2% to 21,136 vehicles.
Mahindra & Mahindra, India's largest maker of sport-utility
vehicles, recorded a modest increase in December sales, lifted by
demand for its diesel-powered SUVs and the Verito sedan.
Mahindra sold 45,297 vehicles in December, a growth of 5.9%.
Sales of the company's SUVs and the Verito car gained 18% to 22,761
autos, but that of four-wheeled light commercial vehicles fell 0.4%
to 13,706 autos.
Toyota Kirloskar Motor Pvt. recorded a 24% decline to 12,071
vehicles in December. The maker of the Etios cars and Fortuner SUV
said sales in 2012 grew 27% to 172,241 vehicles.
The Indian units of U.S. auto maker Ford Motor Co. (F) and
Japan's Honda Motor Co. (HMC) recorded solid growth.
At Ford, December sales surged 42% to 10,899 vehicles, aided by
strong growth in exports and year-end discounts on its vehicles as
well as offers on vehicle financing.
Ford's India sales grew 9% to 6,517 vehicles while exports more
than doubled to a record 4,382 cars from 1,685 a year earlier.
For the full year, Ford India - which makes cars such as the
Figo and Fiesta -- said its local sales declined 9% to 87,600
vehicles while exports increased 35% to 30,435 vehicles.
Honda sold 4,242 cars in December, compared with 1,042 a year
earlier, mainly due to demand for its Brio hatchback and the City
sedan.
After several years of runaway growth, car sales in India have
slowed amid concerns of job losses in a slowing economy as well as
higher loan rates and rising fuel prices.
The weak market conditions have led companies to introduce new
models and offer customized loans at cheaper interest rates to
attract new buyers.
Recent auto launches include a new version of Maruti Suzuki's
Alto small car, Renault's Duster SUV, General Motors Co.'s (GM)
SAIL U-VA and Spark hatchbacks.
In December, car makers announced year-end discounts on several
models, while announcing plans to raise car prices from January.
Despite their efforts, most customers continue to postpone their
purchasing decisions.
The Society of Indian Automobile Manufacturers has cut its
forecast for growth in car sales to between 1% and 3% for this
financial year through March 2013, from the earlier estimate of
9%-11%.
For the 2012 calendar year, sales at Hyundai - which makes cars
such as the i10 and the i20 - increased 4.1% to 641,281 vehicles.
Domestic sales declined 4.7% to 391,276 vehicles, while exports
rose 3.1% to 250,005 vehicles.
Despite the current somber scenario, analysts and companies are
optimistic that India will grow to become one of the world's
biggest car markets by the turn of this decade.
"While the long-term fundamentals of the Indian economy remain
robust, the sluggish global environment has impacted sentiment in
the domestic market in the short-term," Sanketh Arouje, an analyst
at Dun & Bradstreet India said in a recent report.
"But we expect this to be only a temporary phenomenon, and
prospects for 2013 look better than this year," Mr. Arouje said,
adding that the bounceback would be driven by an expected
improvement in macro conditions, moderation in interest rates and a
revival in consumer confidence after the first two quarters the
year.
Among other figures released Tuesday, sales at Hero MotoCorp
Ltd. (500182.BY), the largest motorcycle maker in India, remained
almost unchanged at 541,615 autos in December, compared with
540,276 a year earlier.
TVS Motor Co. (532343.BY) posted an 8.3% decline in December
sales from a year earlier to 156,221 units.
The maker of Phoenix and Apache motorcycle models sold 60,210
motorcycles in the month, a growth of 6.3%. Scooter sales fell 32%
to 30,398 autos.
Write to Santanu Choudhury at santanu.choudhury@dowjones.com
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