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Maruti Suzuki posts fastest sales growth in 16 months as new models drive demand

Tata Motors' sales jump 58% in May

Domestic sales of Maruti's cars, minivans, and sport-utility vehicles rose 24%.   © AP

MUMBAI (NewsRise) -- Maruti Suzuki India, the nation's largest carmaker, reported its fastest sales growth in 16 months in May as new models drove demand for its compact vehicles.

Total sales grew 26% to 172,512 units last month, the Suzuki Motor unit said in a statement on Friday. Domestic sales of Maruti's cars, minivans, and sport-utility vehicles rose 24% to 161,497 units while exports jumped more than 48% to 9,312 units.

Demand for Maruti's compact cars such as Swift and Baleno surge 51% to 77,263 units last month, while sales of Vitara Brezza SUV and Ertiga minivan grew more than 13%.

In recent years, growth of India's automobile industry has been driven by compact SUVs as an increasing number of Indians with higher disposable incomes prefer bigger vehicles. Sales of industry-wide SUVs expanded 21% in the year ended in March, outpacing a 15% rise in overall passenger vehicle sales.

Tata Motors, the owner of Jaguar Land Rover, reported a 58% jump in May sales. Its compact cars and SUVs -Tigor, Tiago, and Hexa -- continued to drive sales for the Tata Group flagship.

Mahindra & Mahindra, India's second-largest SUV maker, reported a 12% rise in May sales to 46,849 units, helped by demand for its commercial vehicles. Sales of Mahindra's utility vehicles, cars, and vans barely grew 2% as the company faced stiff competition from Maruti, Fiat Chrysler's Jeep brand, and Ford Motor.

Meanwhile, both Mahindra and Tata Motors are aggressively rolling out electric vehicles, as they seek to dominate India's nascent market for such automobiles amid a government push to curb pollution in cities. On Thursday, both the companies tied up with the western Indian state of Maharashtra to supply 1,000 electric vehicles each.

Last year, the two automakers won contracts from Energy Efficiency Services, a company under India's power ministry, to replace over the next four years the fleet of petrol and diesel vehicles used by bureaucrats.

Meanwhile, Tata Motors also partnered group company Tata Power to establish electric vehicle charging stations at nine locations in Maharashtra for public use. Tata Power had last year said it is setting up the charging infrastructure at 1,000 locations in the national capital in the next five years with 1 billion rupees ($15 million) investment.

Shares of Maruti and Tata Motors gained 3% and 1.5% respectively, in Mumbai trading, while Mahindra saw a 2.4% decline. The benchmark S&P BSE Sensex lost 0.3%.

--Dhanya Ann Thoppil

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