Monday, May 05, 2008

Tata Motors April 2008 Sales Fell by 5.8%

Indian auto maker Tata Motors has experienced 5.8% fall in its sales in April 2008 compared with the sales unit of the year-ago period. India based Tata Motors Limited (ADR) (NYSE:TTM) is one of the leading domestic car makers in the country. The company sold 38,149 in April this year compared with 40,486 of April 2007.

Tata’s passenger vehicles business was one of the big reasons behind its decline in sales. Tata Indica sales fell by 32 per cent at 7,430. Even though Tata’s other passenger range of cars including Indigo, Sumo and Safari have done well, the company suffered an overall decline only because of the sharp decline of its Indica sales.

Nevertheless, Tata posted an increase of 7 percent at 21,001 in its sales of commercial vehicles in April. However, the company’s exports in April also declined by 43 percent which is defiantly a major cause of concerns.

Sify reported:

The decline is largely on account of the 12-per cent dip in the passenger vehicle business. From 16,842 units in April 2007, it came down to 14,843. Among Tata’s passenger vehicles, Indica was the worst hit. Indica sales declined 32 per cent to 7,430.

Medium and heavy commercial vehicle sales stood at 11,248, an increase of 8 per cent. LCV sales were 9,753, an increase of 6 per cent over April 2007. There was a sharp decline in Tata Motor’s exports in April.

India has one of the emerging car markets around the world which is growing rapidly. The county has a big population and there is a lot of scope the automobile market in India could grow more and more. So, the global companies are now interested to come into India’s ever increasing car market and the companies are also interested to make the best use of India’s cheap labor which would reduce their the production cost letting the companies offering a competitive price for the global market. Some of the leading car manufacturers have already entered into Indian market and the rest are eager to come.

So, naturally, there is a huge competition and I am not surprised that Tata’s sales declined in April. However, the good news for Tata is that its much awaited Tata Nano, dubbed as world’s cheapest car, is expected to hit the market this year. Tata Nano will go on sale for 100,000 rupees ($2,500 or £1,277), which is definitely an eye catching offer for India’s price sensitive market. So, Tata’s performance in the coming months of this year is expected to be satisfactory.