India's Tata Motors Dec sales almost halve on year

MUMBAI, Jan 2 (Reuters) - Sales by India's largest vehicle maker, Tata Motors Ltd (TAMO.BO), plummeted in December as tight credit in a traditionally weak month and a slowing economy trimmed demand.

Overall vehicle sales dived an annual 47 percent to 25,219 units, while commercial vehicle dropped an even sharper 51 percent from a year ago. Passenger car sales fell 31 percent.

"A deepening recessionary trend in the economy, coupled with continuing credit squeeze and high interest rates, has further depressed customer sentiments. As a result, automobile purchases are being severely impacted," the company said in a statement.

On Thursday, the country's largest car maker, Maruti Suzuki India Ltd (MRTI.BO), in which Japan's Suzuki Motor Corp (7269.T) has a 54.2 percent stake, reported a 10 percent drop in sales.

"Automobile sales are usually modest in December because many consumers try and postpone their purchases to the new year when companies push sales trough heavy discounts and offers," brokerage Sharekhan said in a note on Friday.

All vehicles makers cut prices last month after the government cut excise duty by 4 percentage points but it failed to have any impact.

Top utility maker Mahindra & Mahindra Ltd (MAHM.BO) saw sales fall 30 percent.

Bucking the trend, No. 2 car maker Hyundai Motor India Ltd (HMIL), the wholly-owned unit of Korea's Hyundai Motor Co (005380.KS) saw its sales rise nearly 56 percent in December helped by exports, discount schemes and other incentives.

"We at HMIL have fared better as we have a strong line-up of products in the compact segment which has kept our sales steady," its sales and marketing head, Arvind Saxena, said in a statement, admitting the market was challenging.