Global Biz
Car sales slow in US as India accelerates
(Agencies)
Updated: 2010-10-02 08:29
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NEW YORK - Car sales in the United States, Europe and Japan stayed stuck in low gear in September, while emerging markets like India raced ahead.
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The global auto industry's recovery from the financial crisis has been patchy and largely reliant on growth in countries such as China and India, as well as government subsidies and incentives to revive demand.
India's top automakers reported strong September sales, fueled by the country's robust economic growth, but car sales in Japan fell for the first time in 14 months in September after government incentives dried up.
"Overall, I am not that pessimistic about auto demand worldwide," said Lee Sang-hyun, an analyst at NH Investment & Securities in Seoul. "Although demand in the US and Europe is sluggish, sales are growing in emerging markets."from a year earlier, the third month of double-digit declines following an end to government subsidies.
In France, sales of new passenger cars fell 8.1 percent in September, while Italy's new car sales fell 18.9 percent as the loss of incentives to buy less-polluting cars weighed on demand.
In Korea, Hyundai Motors saw year-on-year sales growth of 1.8 percent in September.
Hyundai, the world's fifth-largest carmaker along with its affiliate Kia Motors, benefited from Beijing's subsidies for fuel-efficient models in China, while its Sonata sedan posted strong sales in the United States, analysts said.
Leading US carmakers all reported double-digit percentage gains from a year ago, but General Motors Co said it expected industry-wide sales in September were lower than in August.
GM posted a year-on-year sales gain of 10.5 percent, while Ford Motor Co reported a rise of 46 percent and Chrysler Group said its sales jumped 61 percent.
Hope Emerging
At the Paris Auto Show this week, top carmakers let cautious optimism creep into their outlooks as they looked to emerging markets to dispel the dark clouds over Western economies.
Fiat Chief Executive Sergio Marchionne said the Italian carmaker expects to report a net profit this year as good sales in Latin America this month helped offset weaknesses in Italy and elsewhere in Europe.
The European sales chief for Volkswagen, Europe's biggest carmaker, forecast the global car market will grow by 6-7 percent this year.
Sales at India's top automakers remained robust in September, up as much as 30 percent on a year ago and showing no signs of slowing.
Sales at Maruti Suzuki, India's top carmaker, grew almost 30 percent in September from a year earlier, accelerating from August.
But Japanese sales, after holding up surprisingly well in August, fell 4.1 percent excluding 660cc minivehicles, the Japan Automobile Dealers Association said.
Sales in Japan are expected to come under further pressure after the government stopped accepting applications for its green-car subsidy program last month.
Toyota Motor Corp had been a big beneficiary of the program, particularly with sales of its hybrid flagship Prius. But Toyota's domestic dealership orders fell more than 40 percent in September after funds allocated to the cash-for-clunkers scheme were almost exhausted, the Nikkei business daily reported.
Christopher Richter, an auto analyst at CLSA Asia-Pacific Markets in Tokyo, expected the pattern in Japan to be a repeat of what had happened in Germany -- a period of good sales followed by some very poor sales.
"The makers that are going to get hit the worst by this are going to be first Toyota followed by Honda because these subsidies were constructed to give the maximum subsidy to those who bought the most fuel efficient vehicles," he said.
"When we get into the fully bad month of October probably everybody is going to be down."
India Sales Grow
With demand in developed markets lackluster, global automakers have been increasing their focus on faster-growing regions such as China, now the world's largest auto market, and India.
Sales at Maruti Suzuki, India's top car maker, grew almost 30 percent in September from a year earlier, accelerating from August.
The company, which sells one of every two cars in India, said on Thursday it expects to sell 1.2 million vehicles in the current fiscal year that ends next March, up about a fifth on last year's sales.
"The volume growth is high because economic factors are supportive. The base effect will catch up from the next month for the major auto makers," said Vaishali Jajoo, auto analyst at Mumbai's Angel Broking.
"While rate of growth may taper off, in absolute numbers, I think sales will remain strong."