Maruti Suzuki saw an increase of six per cent in sales during the festive season this year against an anticipated double digit growth, said India’s largest car maker on Wednesday.
“The festive season was below expectations. The sentiments were dampened when season started with Onam in Kerala due to floods. We were expecting that sentiment to revive by Diwali but factors like interest rates, firm fuel prices and additional cost of Rs 9,000 on insurance premium were a drag. The stock market is not doing that well,” said R S Kalsi, senior executive director (marketing and sales) at Maruti Suzuki, which sells every second car in the country.
Kalsi was positive that business would improve. “Now oil price has started coming down and inflation appears to be under control. All these give a sense of optimism and we will strive to reach the target of double digit growth. If customers decide not to purchase, we cannot do anything”, he said. The company has seen a 9.1 per cent growth in domestic sales during April-October period to 1.04 million vehicles.
The sentiment is better in rural market compared to urban areas due to three good consecutive monsoons and the government increasing support prices for crops, said Kalsi. Metro markets are under pressure and there are concerns like traffic congestion and impact of shared mobility. “Our urban sales are growing at just two to three per cent while in semi-urban and rural the growth is around 12 per cent”.
Maruti Suzuki launched on Tuesday the fifth generation multi-purpose vehicle (MPV) Ertiga at a price beginning Rs 744,000 (ex-showroom). The company and its suppliers invested Rs 9 billion in development of the new Ertiga. “We hope to enhance the market share in MPV segment with the new Ertiga,” said Kalsi.
On Tuesday, rating agency Crisil trimmed its forecast for domestic passenger vehicle sales by 200 basis points to a range of 7 to 9 per cent from earlier expectation of 9-11 per cent for FY19