Toyota Kirloskar Motor (TKM) intends to raise output to 3,800 units per month from May 09

Aug. 1, 2009 - PRLog -- An uptick in vehicle sales in March ensured that sales growth remained positive in FY09. The report examines how tax cuts on passenger cars, and a scheme to encourage the purchase of new buses for public transport, helped to increase sales in the last fiscal quarter. This resulted in the market (including two- and three-wheel vehicles) achieving growth of 0.71% y-o-y. The Society of Indian Automobile Manufacturers (SIAM) has reported that without these government measures, passenger car sales numbers would have finished the year flat or down by around 3% while commercial vehicle sales figures would have fallen by 30-40%. In fact, car sales were up by 1.31% and the commercial vehicle segment contracted by 21.7%.

The two-wheel segment grew by 2.6% as restricted credit availability turned some consumers away from cars altogether.

As a result, both the passenger car and commercial vehicle segments are continuing to secure investment. With the market having improved over 4M09, Toyota Kirloskar Motor (TKM) now intends to raise output to 3,800 units per month from May. By July, the plant will reach its full capacity of 5,000 monthly units as it plans to launch its new small car. TKM has said that this will fall into the B+ 'premium compact' segment, competing with Maruti Suzuki's Swift and Škoda Auto's Fabia.

Meanwhile, Germany's Daimler Trucks has agreed to buy out its Indian JV partner Hero Group and go ahead with truck production in Chennai. As a result of the global financial slowdown, Hero is concentrating on its core motorcycle business, leaving Daimler to take over its 40% stake at a cost of around INR1.06bn (US$21.09mn).

Labour tensions at Hyundai India's plant, however, highlight the negative aspects of the Indian market as reflected in the Business Environment Ratings. India shares the same pros and cons as China, ranking highly in terms of high production and sales growth potential, but with a low score for country structure, again caused by a large gap between wealthy urban and poorer rural areas, which acts as a restriction on future penetration rates. However, the country's regulatory environment rating is bolstered by the government's efforts to encourage 'green' motoring, as well as a number of FTAs.

Maruti Suzuki continues to dominate the passenger car market with a share of over 52%. Its annual sales of 722,184 are well beyond the reach of its nearest competitor. Hyundai follows with a 15.7% share, slightly down from FY08. This held national manufacturer Tata Motors back in third place, with 12.9% from sales of 200,159 units, a 19.8% increase from the previous fiscal year. Mahindra and Mahindra, meanwhile, increased its share of the utility vehicle segment to 57%

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