MUMBAI (NewsRise) -- Maruti Suzuki India's sales in February declined as subdued demand for vehicles in a weak macroeconomic environment continued to weigh on the nation's largest carmaker.
Total sales including exports fell 0.8% to 148,682 units last month, the Suzuki Motor unit said in a statement on Friday. Domestic sales of Maruti's cars, minivans, and sport-utility vehicles grew just 0.9% to 139,100 units.
Passenger vehicle sales in India have been tottering since July, reflecting a slowdown in .the overall economy as fuel prices rose and farm incomes dropped. The nation's gross domestic product grew at the slowest pace in five quarters during the October-December period, data showed yesterday. A credit slowdown in the aftermath of a near meltdown at a major non-banking financial company in October further damped automobile demand.
The industry's woes were reflected in the poor financial performance of top Indian car makers in October-December. Maruti Suzuki's net income fell more than 17% in the quarter while Mahindra & Mahindra, India's second-biggest SUV maker, reported a 11% decline.
Sales of Maruti's new version of Ciaz sedan plunged 37% last month, while demand for Maruti's minicars WagonR and Alto slumped 27%. Sales of compact cars such as Swift and Baleno grew more than 11%.
Maruti said starting February, sales of new WagonR models are reported under the compact sub-segment, while the old model, which is being discontinued, is reported in the mini sub-segment.
Maruti's exports slumped 20% in February.
Mahindra reported a 10% jump in total February sales at 56,005 units. The company witnessed a 16% growth in sales of SUV portfolio, on the back of its newly launched XUV300 model, Rajan Wadhera, president of the automotive division, said in a statement.
Tata Motors reported a 3% decline in overall sales last month, weighed by a sharp fall in demand for commercial vehicles. Its compact cars and SUVs, including the new Harrier, drove a 2% rise in domestic passenger vehicle sales.
Nomura remains cautious of the demand outlook over the next few months. In the near term, better liquidity and government action to support the rural economy and the farmers could benefit demand to some extent, it said. However, on a high base, the volumes are likely to remain "muted" until the first quarter of the fiscal year 2020, it added.
In January, India's main automobile industry group Society of Indian Automobile Manufacturers, or SIAM, slashed its forecast saying sales of passenger vehicles, including cars, sport-utility vehicles, and vans would grow at best 5.5% in the fiscal year ending March 31. SIAM had previously forecast a growth of 7%-9% for the year.
Shares of Maruti rose 1.5% on Friday, while Mahindra gained 0.4% in Mumbai. The benchmark Sensex index closed 0.6% higher.
--Dhanya Ann Thoppil