New Delhi: Country’s largest carmaker Maruti Suzuki, which reported a 12% year-on-year growth in dispatches at 4.14 lakh units during April-June 2023 period expects the momentum to continue in the coming months. During April-June 2022, the company despatches were at 3.69 lakh units.
“New launches, improvement in supply chain, and reasonably strong demand pattern from the rural markets were some of the growth factors for the industry during Q1. However, high interest rates and monsoons are the two important factors that have to be closely monitored in Q2,” Shashank Srivastava, Senior Executive Officer- Marketing and Sales, Maruti Suzuki said on Saturday.
“About 80% of the retail sales in the auto industry happens via loans. The RBI has indicated that it is going to be some time before the inflation is stabilised, and the interest rates are expected to remain high. Secondly, it is estimated that the rural penetration in the industry is about 30-32%. So erratic monsoon which may result from the El Nino effect could be another challenge,” he noted.
“Steel prices are fluctuating, so we are closely watching the commodity prices as well,” Srivastava added.
Maruti Suzuki, which currently has pending orders for 3.55 lakh vehicles, said the shortage of electronic components had a minor impact on the production volumes. However, the semiconductor supply situation is expected to be much better from July.
“There is a demand-supply mismatch in the industry. It may be called a tale of two cities- one, where we have large stock levels for some models and therefore discounts and incentives are being given to generate demand; and another, where certain models have pending bookings and long waiting periods,” Srivastava stated.
Road Ahead
During April-June 2023, the domestic PV industry recorded best-ever Q1 in terms of wholesales. For July-September 2023, the growth in wholesales is expected to be muted on a high base of last year, Srivastava said. The PV industry reported record sales at 10.26 lakh units in Q2 FY23.
In the first half of the calendar year 2023, the industry has crossed the 20 lakh sales-mark, marking a 10% growth over 18.31 lakh units dispatched in the January-June period of CY 2022.
Maruti Suzuki estimates the industry wholesales to grow by about 5% year-on-year, to clock 41 lakh units for fiscal year 2023-24. The industry reported record sales of 39 lakh units during fiscal year 2022-23.
“Our projection for the industry remains at 41 lakh units. The growth percentage will be lower owing to the high base of last year,” he said.
The maker of Fronx and Jimny has increased its share of SUVs from 8.5% in Q1 FY23 to 21% in Q1 FY24. It expects this share to hover around 21-23% in the July-September 2023 period. “We are hopeful of garnering around 25% share in SUVs by the end of the current fiscal year, and take the No 1 slot in the segment. The growth from the first quarter of last year to now has been due to the introduction of new models in the segment. Further, it will depend on how quickly we can ramp up the production for these models.”
Since the beginning of FY23, Maruti Suzuki has introduced new models in the SUV segment including the updated Brezza, Grand Vitara, Jimny and Fronx.
Export Sales
The carmaker reported a drop of 9% to 63,218 units in its export sales during April-June 2023 period, when compared to 69,437 units in the same period last year.
“In June, there were some delays in shipments, largely owing to cyclone Biparjoy. Due to this, many ships got delayed. Other than this, the outlook on the exports front remains positive for the year,” the company said.
Latin America, Middle East and Africa occupy a large portion of Maruti’s exports.
