Oct. 10 (Bloomberg) -- Suzuki Motor Corp., Japan's second- largest minicar maker, sold more vehicles in India than its home market for the first time, twenty-five years after it entered the country.

Maruti Suzuki India Ltd., 54 percent owned by Suzuki, sold 336,758 cars, vans and sport-utility vehicles in the domestic market between April and September, the Society of Indian Automobile Manufacturers said today. That exceeded the preliminary 315,000 vehicles Suzuki sold in Japan in the same period, according to spokesman Takuma Mizuyoshi.

Suzuki's success in India, where it controls half of the car market, has prompted automakers such as Hyundai Motor Co. to build factories in the country in the past decade. Japan's aging population has led to a two-year slump in the domestic market and increased reliance on overseas sales for Suzuki, Toyota Motor Corp. and other Japanese carmakers.

``This is significant and it's a pointer to other companies on what potential India holds for the future,'' said K.K. Mital, who manages 1.8 billion rupees ($46 million) of stocks at Escorts Asset Management in New Delhi. ``Car ownership is still very low in India and companies will look to this market as sales shrink in their own home markets.''

Car Ownership

Only seven in 1,000 people own a car in India, compared with 10 per 1,000 in China, 500 in Western Europe and 450 in the U.S. Record economic expansion has boosted car sales in eight of the past 10 years in India, prompting Hyundai, Renault SA and General Motors Corp. to expand Indian facilities.

This year, India's 1.1 billion people will snap up vans, small trucks and cars more quickly than anyone except the Chinese, according to research firm Global Insight Inc. From 2006 through 2011, India will be the fastest-growing auto manufacturer among the world's top 20 car-making countries, New York-based accounting firm PricewaterhouseCoopers LLP says.

Shares of Maruti have gained almost nine-fold since a 2003 initial public offering in India. The stock climbed to a record 1,135.85 rupees on the Bombay Stock Exchange today before giving up the gains. Suzuki shares have tripled in Japan in the past six years and rose 1.4 percent to 3,600 yen in Tokyo today.

Overseas Sales

Japanese automakers are increasingly expanding overseas to counter a drop in domestic sales. Japanese vehicle sales have fallen for 18 straight months through September.

Toyota, Japan's biggest automaker, is building its eighth factory in North America. Honda Motor Co., the nation's second- largest gets about half of its sales from North America.

In India, GM, Honda, Volkswagen AG and half a dozen other companies plan to spend at least $6.6 billion on new factories. Fiat SpA, Nissan Motor Co., Renault and others are linking with local manufacturers.

Osamu Suzuki, the Japanese carmaker's chairman, got interested in India when one of his aides read a newspaper article about the government's search for a car-making partner. Suzuki met with a team from India in a Tokyo hotel to discuss a possible partnership.

Suzuki and the Indian government started Maruti in 1982 with the Japanese carmaker acquiring 26 percent. The following year, it rolled out the Maruti 800, which remained the nation's bestselling car for more than a decade.

To contact the reporters on this story: Anand Krishnamoorthy in Singapore at anandk@bloomberg.net; Naoko Fujimura in Tokyo at nfujimura@bloomberg.net.

Last Updated: October 10, 2007 05:42 EDT