Carmakers see mild uptick in sales to dealers in January

Higher raw material costs have forced carmakers to raise prices even as they offer discounts to perk up demand.

India's overall car sales to dealers saw a slight increase in January, data released by automakers on Saturday showed, as inflation-wary customers continued to delay purchases.

Domestic sales of India's top four carmakers - which form 80 percent of the country's car market - rose 1.8 percent from a year ago, helped by sales of market leader Maruti Suzuki's small cars and Mahindra & Mahindra's sports utility vehicles.

Peers Hyundai India and Tata Motors saw sales declining 5.5 percent and 10 percent, respectively, hurt by increased competition.

WHY IT'S IMPORTANT

Car sales in India, the world's third-largest car market, have slowed after two years of rapid growth as higher inflation has squeezed buyers' pockets.

Higher raw material costs have forced carmakers to raise prices even as they offer discounts to perk up demand.

The government's proposal to slash personal income tax rates in its annual budget on Saturday has raised hopes of a consumption boost in the world's fifth-largest economy, which could possibly entice more people to buy cars.

India's auto index rallied on the day, settling 1.9% higher.

BY THE NUMBERS

Manufacturer Domestic Sales Change (%)

(units) (y/y)

Maruti Suzuki-173,599-4.1%

Hyundai Motor India-54,003-5.5%

Tata Motors-48,076 -10%

Mahindra & Mahindra-50,659-18%

Toyota-26,178-12.9%

Kia India-25,025-5%

JSW MG Motor India-4,455-256%

*Exports included