MUMBAI -- Mahindra & Mahindra Ltd., toppled Tata Motors Ltd. as India's biggest automaker by market value after slumping passenger car demand dragged down Tata's shares.
Shares in Mahindra, India's biggest maker of SUVs, gained in Mumbai trading on Friday, giving it a market capitalization of 440.74 billion rupees ($9.6 billion). Tata Motors, India's biggest truckmaker and owner of the Jaguar and Land Rover brands, fell 5 percent, valuing the company at 424.14 billion rupees.
Tata Motors' value last fell below Mahindra's in October 2008, when financial markets were reeling from the collapse a month earlier of Lehman Brothers Holdings Inc., according to Bloomberg data.
Tata Motor's Jaguar deliveries have declined this year as the European debt crisis and signs of slowing economic growth in the U.S. eroded demand for luxury vehicles.
The automaker, whose overseas sales account for about 73 percent of total revenue, has dropped 44 percent this year, while rival Mahindra, which exports about 5 percent of its vehicles abroad, has declined 7 percent.
"Tata Motors, through Jaguar and Land Rover, has a high exposure to Europe and North America, where there is a lot of economic uncertainty at the moment," said Surjit Singh Arora, a Mumbai-based analyst with Prabhudas Lilladher Pvt. "Mahindra will continue to have a higher market capitalization over Tata as long as the uncertainty remains."
Tata Motors global group sales in July fell 6 percent from a year earlier to 85,392 vehicles, according to an e-mailed statement on Aug. 16.
The automaker's first-quarter profit was 20 billion rupees in the three months ended June 30 from 19.9 billion rupees a year earlier, according to a statement from the company on Aug. 11.
Profit lagged behind the 21.6 billion-rupee median of 32 analysts' estimates compiled by Bloomberg.
Mahindra reported first-quarter profit rose 8 percent as it sold more pick-up trucks and SUVs.