Maruti betters Suzuki Japan

Suzuki Motor Corp, Japan's second- largest minicar maker, sold more vehicles in India than its home market for the first time, twenty-five years after it entered the country.

Maruti Suzuki India Ltd, 54 per cent owned by Suzuki, sold 336,758 cars, vans and sport-utility vehicles in the domestic market between April and September, the Society of Indian Automobile Manufacturers said today.

That exceeded the preliminary 315,000 vehicles Suzuki sold in Japan in the same period, according to spokesman Takuma Mizuyoshi.

Suzuki's success in India, where it controls half of the car market, has prompted automakers such as Hyundai Motor Co to build factories in the country in the past decade.

Japan's aging population has led to a two-year slump in the domestic market and increased reliance on overseas sales for Suzuki, Toyota Motor Corp. and other Japanese carmakers.

"This is significant and it's a pointer to other companies on what potential India holds for the future,'' said KK Mittal, who manages Rs 1.8 billion ($46 million) of stocks at Escorts Asset Management in New Delhi. "Car ownership is still very low in India and companies will look to this market as sales shrink in their own home markets."

Only seven in 1,000 people own a car in India, compared with 10 per 1,000 in China, 500 in Western Europe and 450 in the US. Economic expansion has boosted car sales in eight of the past 10 years in India, prompting Hyundai, Renault and General Motors to expand Indian facilities.

This year, India's 1.1 billion people will snap up vans, small trucks and cars more quickly than anyone except the Chinese, according to research firm Global Insight Inc. From 2006 through 2011, India will be the fastest-growing auto manufacturer among the world's top 20 car-making countries, accounting firm PricewaterhouseCoopers LLP says.

Shares of Maruti have gained almost nine-fold since a 2003 initial public offering in India. The stock climbed to a record Rs 1,135.85 on the Bombay Stock Exchange today before giving up the gains. Suzuki shares have tripled in Japan in the past six years and rose 1.4 percent to 3,600 yen in Tokyo today.

Meanwhile, the auto industry saw its biggest monthly sales decline of the year in September as steep interest rates continued to hit customers' pockets even as the festive season starts.