April 1 (Bloomberg) -- Tata Motors Ltd., India’s biggest commercial vehicle maker, said sales fell 14 percent in the year ended March as slowing economic growth damped demand for trucks.
Tata Motors sold 498,581 vehicles in India and overseas last year, compared with 582,390 a year earlier, the company said in a statement today. March sales totaled 54,485 vehicles in India and overseas, it said without giving a comparative figure for the year earlier.
Slowing growth in Asia’s third-biggest economy has hurt demand for Tata Motors’ vehicles, prompting Standard & Poor’s and Moody’s Investors Service to lower the company’s credit rating. Tata Motors, after incurring its first loss in seven years in the October-December period, will take orders for the world’s cheapest car, Nano, this month, as it seeks to boost sales by attracting motorcycle buyers wanting to trade up to four wheels.
“Demand for commercial vehicles isn’t likely to improve at least till September-October,” said Amish Shah, a Mumbai-based analyst at Antique Stock Broking Ltd. “Unless the industrial production picks up, movement of goods will remain lower and freight operators will have excess capacity.” Shah has a “sell” rating on Tata Motors.
Local sales of vehicles in March were 52,686 vehicles, 13 percent less than a year ago, Tata Motors said.
Sales of Tata Motors’ trucks and buses in the local market fell 19 percent in March to 29,006. Indica hatchbacks and Safari utility vehicles’ sales fell 4 percent to 23,680.
“The financial stimulus announced by the government, particularly for commercial vehicles, has had a positive impact, the retail market would still take some time to reach the corresponding period levels of the last fiscal,” Tata said in a statement.
India forecast the economy expanded 7.1 percent in the year ended yesterday, after growing at 9 percent and 9.7 percent in the previous two years.
Tata Motors fell 0.2 percent to 180 rupees at close of trading in Mumbai today.
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