New Delhi: Suzuki Motor Corporation informs that Maruti Suzuki has made adjustments due to slower-than-expected vehicle sales in Q1 of FY 2024-25. This reduction in demand brought higher inventories and stockpiling concerns for Maruti Suzuki and other OEMs (Original Equipment Manufacturers), as stated in its analysts’ call transcript seen by ETAuto. “ As inventories have increased, we are making adjustments,” Suzuki states.
Suzuki aims to overcome this situation through critically monitoring the demand trends during the festive season. “The full-year forecast has not been changed, since the market outlook is that demand for Indian automobiles is still uncertain… We are currently adjusting production to reduce market stock and are closely monitoring demand trends,” Suzuki further adds.
Inventory adjustments observed by the Indian automobile industry are attributed to multiple reasons, like elections and adverse weather conditions, (such as heavy rains and heat waves), says Suzuki. FADA (Federation of Automobile Dealer Association) has raised concerns over high inventory levels at dealerships and has requested the OEMs to rationalise their production.
However, Q1 of any financial year is expected to record lower demand, which also serves as an opportunity for OEMs (Original Equipment Manufacturers) to prepare their inventory for the upcoming festive season.
Buckling up for the upcoming quarters
Maruti Suzuki is now gearing up for the festive season as it expects higher volume demand in the upcoming quarters. “The festive season starts in late August, a little earlier than the previous year, and the higher the demand, the volume for the whole period becomes bigger.”
The full-year growth projection from SIAM is anticipated to be approximately 2-3% above last year’s level. Thus, Suzuki aims to place efforts to increase the number of units to the same level as initially planned, incorporating government measures in India.
“We believe that demand will be stimulated to some extent in the second half of the fiscal year. In India, the rate of progress in the Q1 is between 20% to 22%, and it will increase to 25% to 30% from the second quarter to the third quarter during the peak demand period of the festive season,” states Suzuki.
Increase demand for alternative fuel vehicle sales
Retail sales in July have been slightly increased when compared with Q1, but Maruti Suzuki still has to make inventory adjustments, added Suzuki.
However, Suzuki has highlighted the increase in CNG vehicle sales in India. Earlier CNG vehicles had observed a longer backlog due to CNG component supply capacity, which is now improving. “In particular, the supply of CNG for Ertiga was in short supply, but from the beginning of this fiscal year, the supply became sufficient,” adds Suzuki.
“In the future, we would like to connect this to biogas and CBG, which we are working on, and create a system to achieve net zero for cars using carbon-neutral fuel, so we would like to increase the supply of CNG cars,” added Suzuki.
Another reason for the increased demand for CNG vehicles is due to higher profits. “Since the fuel cost of CNG is considerably lower than that of petrol and the demand from customers is very strong, we intend to further expand sales while maintaining a good balance between the two,” explains Suzuki.
Into the foray of EVs
Suzuki Motor Corporation is going to announce its BEV(Battery Electric Vehicle) at the Auto Expo scheduled for next year, with an anticipated launch in early 2025. However, Suzuki has outlined that its focus will be in Europe followed by India, and then Japan.
“As for HEVs, we have already been supplied with THS models from Toyota, but we will use our own strong HEVs or mild HEVs while balancing appropriate models,” adds Suzuki.
