India's largest carmaker, Tata Motors Ltd, posted a 47 percent decline in sales for the month of December compared with last year, which amounted to 25,219 units. Sales of commercial vehicles dropped 51 percent, while passenger car sales slumped 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. Shares of Tata Motors fell nearly 78 percent last year, although shares were back up 2.6 percent last Friday.
India's other large-volume automaker, Maruti Suzuki India Ltd, which is owned 54.2 percent by Japan's Suzuki Motor Corp, posted a 10 percent drop in sales. Top utility vehicle maker Mahindra & Mahindra Ltd posted a sales drop of 30 percent. Hyundai Motor India Ltd, India's number 2 in car sales, escaped the sales carnage, posting an increase of almost 56 percent.
Tata Motors suffered several blows in 2008. The company purchased ailing Jaguar Land Rover from Ford at a price of $2.3 billion last summer, and it is estimated that over $1 billion is needed to breathe life back into the luxury brands. In September, angry farmers successfully forced Tata to stop construction of its plant in West Bengal where the world's cheapest car, the Tata Nano (pictured above), was intended to be produced. Tata announced in October that the plant would be built in Gujarat instead. Production was initially supposed to begin in October 2008, but was pushed back to 2009 or 2010.