Mixed June Results for Automakers in India

Sales of diesel-powered vehicles rose, as the Indian government has kept diesel fuel at below-market prices.

India's largest passenger-car manufacturer reported improved monthly sales on Monday, but rivals showed declining business on high taxes and fuel prices.

Maruti Suzuki India, majority-owned by Japan's Suzuki Motor Corp. (IW 1000/136), said passenger-car sales in June rose 19.3% year-on-year to 83,531 vehicles, after demand had slowed last year.

Maruti's compact cars and utility vehicles both showed improved sales as the firm increased production of diesel-powered cars.

Diesel fuel, widely used to transport goods and services across India, is priced about 40% cheaper than gasoline.

While petrol prices have been deregulated, the government has kept diesel at below-market prices.

The local unit of Hyundai Motor Co. (IW 1000/27), which mostly sells petrol vehicles, posted flat local sales at 30,450 vehicles in June.

Ford India domestic sales slid 11% to 6,257 vehicles in June while General Motors in India also fell 11% to 7,364 units.

Tata Motors Ltd.'s June car sales were down 22% to 17,244 units.

Last month, Tata Motors (IW 1000/185) and General Motors (IW 1000/13) halted production at some factories to reduce stockpiling.

"While the market continues to face difficult challenges, these are only cyclical and we are confident of the long term outlook," said Michael Boneham, president and managing director of Ford India.

India, which has been one of the world's fastest-growing car markets in recent years, suffered a slowdown in demand in 2011 as many buyers decided to defer purchases due to costly loans and high fuel expenses.

India's Society of Automobile Manufacturers forecasts that car sales will grow 10% to 12% in the current financial year, which ends March 2013.

Copyright Agence France-Presse, 2012   

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