Maruti Suzuki targets double-digit sales growth in FY13

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Maruti Suzuki , India's largest passenger car maker, targets a double digit sales growth in 2012-13 (April-March), helped by new launches and increased supply of diesel vehicles, coupled with the low base in 2011-12.

"We are targeting double digit growth, yes," Mayank Pareek, managing executive officer - marketing and sales told CNBC-TV18.

Passenger car makers have been hit by a sharp slowdown in 2011-12 as customers deferred purchases due to expensive loans and high fuel prices. Society of Indian Auto Makers has forecast a flattish growth this fiscal.

Maruti Suzuki was also hit by a labour unrest at its plant in Manesar, which sent production of its popular Swift hatchback for a toss. The company lost 40,000 units in production in the October-December quarter due to the workers' strike.

Pareek said that production has returned to normal levels at Manesar. The pickup in production at Manesar has helped in getting Swift production back on track.

Maruti Suzuki's total vehicle sales in January rose 5.2% year-on-year to 115,433 units. The compact segment, which includes the Swift, Estilo and Ritz, saw sales jump 22.4% to 25,756 units.

Pareek said increased supply of diesel vehicles also boosted sales growth in January. More customers are preferring diesel vehicles as oil marketing companies hiked petrol prices several times last year.

Pareek said in January, diesel vehicle sales rose 34%, Maruti's petrol car sales declined 6%.

Maruti too has been focussing on producing more diesel vehicles. Suzuki and Italian car maker Fiat had inked a diesel engine supply deal last month. Fiat will supply one lakh 1.3 litre diesel engines to Maruti Suzuki for three years from Jan, as per the deal.

Below is an edited transcript. Watch the accompanying video for more.

Q: Which category drove the sales growth? What kind of monthly clip you think you could be comfortable getting too over the next couple of months?

A: It's after six months that we have reported positive figures. We have grown about 5.2% year on year and around 18% month on month this month. Primarily this growth has come on account of increased supply of diesel vehicles. This original phenomenon which we have been discussing in the past is a diesel led growth actually. Even in the month of January, while diesel increased by 34%, petrol actually declined by 6%. So that fundamental issue is still there.

Q: To what extent has production stabilised? What kind of a monthly run-rate can you now settle down in given production?

A: Production is back to normal so this month we have done almost 115-116,000 which is a normal run-rate. So we are back to normal as far as production goes.

Q: In FY13 can we expect 15% plus kind of growth given the poor base of last year?

A: We are targeting double-digit growth, yes.

Q: What will you have to do in terms of pricing? You announced a new launch yesterday on the Dzire. In terms of pricing do you think you may have to tweak things around a little bit to keep volume and sales intact?

A: We did one tweaking in January. We increased prices by around 1% to 3.5%. Right now we don't have any plan to do it again.

Q: What's the inventory situation like?

A: In factories we have about one days stock. Inventory is under control.