2009 May Auto Sales: India Sales Moderate, Maruti and Hyundai Post Rise

In India, car sales moderated in May with market leader Maruti witnessing a double digit growth. Maruti Suzuki India Ltd. and Hyundai Motor Co. - India's top two auto makers by sales - gained in May as demand for their Ritz, i10 and A-Star small cars rose.

However, monthly sales were down for Mahindra & Mahindra Ltd., the nation's largest maker of sport-utility vehicles (SUVs), due mainly to a two-week strike at its Nashik plant in western India.

Sales at Maruti were up for the fifth straight month, gaining 16% in May to 79,872 vehicles.

Local sales increased 10% to 70,785 vehicles, while exports surged 87% to 9,087 vehicles, said the Indian unit of Suzuki Motor Corp.

Maruti, the nation's largest auto maker by sales, introduced the Ritz, its seventh small car model, in May amid intensifying competition from Hyundai and General Motors Corp.

"We are seeing some initial signs of a revival in the auto industry," Amit Kasat, analyst at Mumbai-based Anand Rathi Financial Services Ltd., said by phone.

"With forecasts of a normal monsoon and good GDP growth this year, we should see more demand from semi-urban and rural areas, especially for two-wheelers."

Mr. Kasat, however, said the current growth rate for automakers will taper off in the July-August quarter because of higher sales in the previous year.

Sales of Hyundai's local unit increased 8.4% in May to 43,628 vehicles; of that, local sales fell 4.1% to 23,503 vehicles, while exports rose 22% to 20,125 vehicles.

Arvind Saxena, senior vice president for marketing and sales at Hyundai India, said government incentives in various European countries - including Germany, Italy, France and the U.K. - to revive automobile sales had boosted demand in those markets.

Mahindra sales fell 18% in May to 16,866 units; including 12,620 SUVs, a 3.3% decline from a year earlier.

Sales of the Logan sedan, produced in partnership with Renault SA, plunged to 427 units from 1,531 a year earlier.

In the two-wheeler segment, Hero Honda Motors Ltd., the nation's largest motorcycle maker by sales, posted a 22.5% rise in May sales to 382,678 vehicles.

Hero Honda, the Indian affiliate of Honda Motor Co., produces motorcycles such as the Karizma and Hunk at three factories in Haryana state.

Anil Dua, senior vice president in charge of marketing and sales at Hero Honda, attributed the growth in May sales to the introduction of new products, expansion of the sales network and forays into new markets.

Sales at TVS Motor Co., the third-ranked two-wheeler maker, increased 5.1% in May to 118,574 vehicles, thanks to higher moped sales.