India's car makers say February sales fall

Fri Mar 1, 2013 7:45am EST

* Maruti, Hyundai say Feb car sales lower
    * Mahindra SUVs post 10 pct growth in month
    * Sales down 1.8 percent so far this fiscal year
    * Last annual fall was in 2002-2003

    MUMBAI, March 1 (Reuters) - India's top car makers reported
falling sales in February as high costs and sluggish economic
growth continued to weigh on demand, threatening to result in
the industry's first decline in annual sales in a decade.
    Car sales during the first 10 months of the current
financial year that ends on March 31, were down 1.8 percent
compared to the same period last year, according to the Society
of Indian Automobile Manufacturers (SIAM).
    Over the past few years, billions of dollars of investment
has poured into the industry from the world's biggest car
makers, hungry for growth. Sales grew a record 30 percent in the
year to March 2011 and annual sales have grown every year since
the financial year that ended in March 2003, according to data
from SIAM.
    Indian car makers have been hit by high interest rates and
rising fuel costs. They had hoped incentives to boost the
industry would be announced in the country's budget yesterday,
but instead saw taxes rise on some sports utility vehicles
(SUVs), risking growth in the market's only bright spot.
.
    Maruti Suzuki India Ltd, India's biggest car
maker, said its car sales fell 10.9 percent in February. Hyundai
Motor Corp's Indian unit, the country's No.2, said
its domestic sales dropped 7.6 percent during the month. 
    Tata Motors, the country's third-largest car
maker, said its February sales were down 33 percent. Combined,
the three companies account for 75 percent of the car market.
    "It should definitely end the year negative" said Joseph
George, auto analyst at IIFL in Mumbai.
    Ford Motor Co's Indian unit said its domestic sales
fell 44 percent in February.
    
    Mahindra & Mahindra Ltd, whose growth in sales of
SUVs has been one of the industry's fastest, said its overall
domestic sales rose 10 percent in February, but its SUVs are not
included in car sales data compiled by SIAM.

 (Reporting by Henry Foy; Editing by Elaine Hardcastle)
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