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Easier Loans Boost India Auto Sales

Written By Trading Forex News on Monday, February 1, 2010 | 8:16 AM

Easier Loans Boost India Auto Sales


NEW DELHI -- Maruti Suzuki India Ltd., Hyundai Motor Co. and TVS Motor Co. Monday posted higher vehicle sales for January as easier availability of loans, lower borrowing costs and launch of new models continued to fuel demand for new cars and motorcycles in India.

Maruti, the local unit of Suzuki Motor Corp. and India's biggest car maker by sales, posted a 33% rise in sales in the past month at 95,649 vehicles.

Sales in January are the highest ever for the company in a month, it said. The pervious high, 87,807 vehicles, was in November.

Maruti's local sales grew 21% to 81,087 vehicles, while exports jumped more than threefold to 14,562 vehicles. Local sales in January were also its highest ever, beating the previous record of 76,359 units sold in November.

Auto sales in India have remained robust since February last year as the federal government provided incentives to purchase new vehicles through tax cuts and commercial banks lowered interest rates.

The auto industry estimates demand in the January-March period to remain strong due to expectations people would buy more vehicles before India implements new emission.

The federal government is adopting more-stringent emission norms, equivalent to the Euro-IV standards, in 13 of India's biggest cities by April 1. Auto makers are required to invest in upgrading their vehicles to comply with the rules and a part of the incremental costs will likely be passed on to customers.

The local unit of Hyundai reported a 42% rise in total January sales at 52,635 vehicles. Local sales rose 41% to 29,601 vehicles, while exports rose 43% to 23,034 vehicles.

TVS Motor, a maker of two- and three-wheeled vehicles, said its sales rose 12% to 125,578 units in January. The company's motorcycle sales surged 24% to 54,698 units, while scooter sales grew 43% to 25,509.

TVS Motor, which also makes mopeds, said its exports rose 15% to 16,074 units.

Three-wheeler sales rose more than four times to 1,710 units in January from 466 units a year earlier.

The company currently sells three-wheelers in some Indian cities and plans to launch them across the country in the next few months.

Write to Nikhil Gulati at nikhil.gulati@dowjones.com

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