WRAPUP 2-Korea, India car makers see strong Oct sales, Japan hit

* Korean car makers report record monthly sales

* Japan non-mini vehicle sales down 27 pct, lowest Oct ever

* Indian car makers post double-digit growth

* Korean car makers’ shares jump; Honda slides 5 pct

* Mahindra shares gain nearly 4 pct; Maruti down 2.7 pct
(Adds India’s Mahindra sales numbers, StarMine data link)

By Hyunjoo Jin and Chang-ran Kim

SEOUL/TOKYO, Nov 1 (BestGrowthStock) – South Korean and Indian car
makers posted strong sales in October while their Japanese
rivals saw double-digit declines in domestic sales,
underscoring how emerging market producers are gaining ground
globally.

Japanese car makers face dwindling auto sales on their home
turf with the end of government subsidies, whereas South Korean
companies are expected to continue to outperform the global
market in a weak recovery, driven by new model launches.

Although the Korean won is firming, the Japanese yen, which
hit a 15-year high against the dollar on Monday, remains far
stronger, hurting the price competitiveness of Japanese
vehicles sold overseas.

Growing optimism for Korean car makers sent their shares
surging on Monday, with Hyundai Motor (005380.KS: ) shares
jumping 6.2 percent and Kia Motors (000270.KS: ) shares up 10.2
percent up in a broader market up 1.7 percent. [ID:nTOE6A000W]

“Things cannot be better for Korean automakers,” said
Michael Sohn, an analyst at Macquarie Securities.

“Korean automakers are expected to log higher profits than
Japanese peers this year, but their valuations are cheaper than
Japanese makers. I expect rallies of Korean automakers to
continue for the time being,” Sohn said.

While demand for cars in developed markets is stuck in low
gear on anaemic economic recovery and the end of government
subsidies, global automakers have been increasing their focus
on emerging economies such as China, now the world’s largest
auto market, and India.
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StarMine comparative table: http://r.reuters.com/cax23q

For stories on the global auto industry, see [ID:nCARS1]

For SPECIAL REPORT on GM’s IPO [ID:nN29128518]
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Hyundai Motor, South Korea’s top automaker, saw its sales
rise 10.4 percent at home and abroad in October from a year
earlier, while second-ranked Kia Motors saw its total sales
jump 29 percent.

The latest figures marked record highs and reinforced the
bullish outlook for South Korean carmakers, which are expected
to post strong earnings in the current quarter after reporting
forecast-beating profits for the third quarter last week.
[ID:nTOE69P037] [ID:nTOE69R0AY]

JAPAN WEAK

New vehicle sales in Japan tanked 23.2 percent in October,
the first full month after government subsidies to replace cars
older than 13 years expired, industry data showed.
[ID:nTWK1ME653]

Excluding 660cc minivehicles, sales in Japan slid 26.7
percent, the lowest on record for the month of October, an
official at the Japan Automobile Dealers Association (JADA)
said. It was also the first time that sales fell short of
200,000 vehicles in October in 42 years.

“We have no way of telling how weak demand will be in
coming months,” said Michiro Saito, a manager at JADA.

But he added: “Many dealers were fearing bigger falls of
30-40 percent, so in that sense we’re a bit relieved.”

There was one fewer selling day in October compared with a
year earlier.

Among the worst hit were brands with a relatively high
ratio of models eligible for the government subsidies, Saito
said.

Nissan Motor Co’s (7201.T: ) sales, excluding 660cc
microcars, dropped 30.6 percent, Honda Motor Co’s (7267.T: ) fell
29.9 percent, while Mazda Motor Co’s (7261.T: ) sank 52.5
percent.

Leader Toyota Motor Corp (7203.T: ), whose hybrid models
still enjoy exemptions on some taxes under a separate
government incentive scheme, saw a comparatively tame fall of
24.7 percent, including its high-end Lexus brand.

In contrast, imports, which are made up mostly of
European-badged cars that were not eligible for the subsidies,
jumped 29.6 percent in October.

Honda Motor reported last week a 150 jump in operating
profit despite the strong yen, but decelerating demand at home
and a strong yen cloud the outlook for Japan’s No. 2 car maker.
[ID:nTOE69S09O]

Honda shares fell 5 percent on Monday as its earnings
disappointed.

Its bigger rival Toyota is set to release its quarterly
results on Friday.

INDIA A BRIGHT SPOT

Indian carmakers maintained double-digit sales growth in
October on robust demand in one of the world’s fastest-growing
markets as a rapidly expanding economy, expected to grow over 8
percent this fiscal year, boosts incomes and consumer spending.

India’s top car maker Maruti Suzuki (MRTI.BO: ) reported a 39
jump in October auto sales from a year earlier, while Tata
Motors (TAMO.BO: ) posted a 21 percent rise in sales. Mahindra &
Mahindra’s (MAHM.BO: ) vehicle sales for the month rose 34
percent.

India’s automobile industry is likely to grow by 18-20
percent in the fiscal year that ends in March, according to the
sector body, Society of Indian Automobile Manufacturers (SIAM).

Demand in India usually rises during the festive season
that starts in September and peaks in November after Diwali,
the Hindu festival of lights, when most employees get their
annual bonuses.

But rising borrowing costs and slow pace of growth in
component supplies are concerns for the carmakers.

Mahindra shares were up nearly 4 percent on Monday after
the October sales data was released, while Maruti shares fell
2.7 percent on concerns about rising costs.
(Additional reporting by Ami Shah and Sumeet Chatterjee in
MUMBAI; Editing by Muralikumar Anantharaman)

WRAPUP 2-Korea, India car makers see strong Oct sales, Japan hit