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TELCO April sales slump 25.6 per cent year-on-year

Tata Engineering and Locomotive Company Ltd, India's largest truck maker, on Monday reported a big decline in new car sales last month, adding to concern over the carmaking operation's drag on earnings.

TELCO, as the company is commonly known, said overall vehicle sales slumped 25.6 per cent in April from a year earlier -- to 9,650.

Sales of medium and heavy trucks dipped 2.9 per cent to 3,636, while sales of utility vehicles tumbled 31.4 per cent to 1,459, reflecting the slowdown in Indian industrial production.

Its car sales plunged 37.5 per cent to 3,258, showing that the new financial year has begun just as the past year ended.

In the past year to March, TELCO sold just 44,165 passenger cars, less than half the number it hoped to sell. It also sold 95,064 trucks, down 34 per cent from the previous year.

The sales data is likely to heighten concern over the company's performance and impact its share price over the next few days, analysts said.

Last month, TELCO shares fell to a more than two-year low of Rs 58 as investors reckoned the company would not be able to improve sales in the face of a slowdown in industrial output.

India's industrial growth slowed to 4.9 per cent in the year ended March from 6.7 per cent in the previous year. This year economists predict growth will slow further to 3.5-4.5 per cent.

TELCO has invested Rs 17.0 billion in the car business, but three years of high-decibel marketing have failed to give it an edge over rivals like South Korean giant Hyundai Motor Co and Maruti Udyog Ltd, a government joint venture with Japan's Suzuki Motor Corp.

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