Maruti Suzuki’s June production hits five-year low amid weak small car demand: Report

Adding to Maruti’s challenge is its absence from the electric vehicle (EV) segment, a space where Tata Motors and Mahindra & Mahindra have already established a lead.

Production at Maruti Suzuki India Ltd, the country’s largest carmaker, fell to its lowest level in five years this June as demand for entry-level cars and compact sedans continued to slow, The Economic Times reported.

According to the company’s monthly production filing, Maruti’s output dropped 23% to 125,392 units, compared to 163,037 units in June 2021. While June typically sees a scheduled plant maintenance shutdown, The Economic Times noted that this year’s production figure is the lowest for the month since 2020.

An email sent to Maruti seeking comment went unanswered, the report added. Moneycontrol could not independently verify the report.

The decline reflects a broader trend in India’s passenger vehicle market, where consumers are increasingly favouring sport utility vehicles (SUVs) and more premium offerings over small cars, long considered Maruti’s core strength.

According to data from the Society of Indian Automobile Manufacturers (SIAM) cited in the report, SUVs now make up 66 percent of the total passenger vehicle sales mix.

Adding to Maruti’s challenge is its absence from the electric vehicle (EV) segment, a space where Tata Motors and Mahindra & Mahindra have already established a lead.

Maruti dealers have seen inventory build-ups, especially for entry-level models such as the Alto, S-Presso, Dzire and Celerio, leading the company to regulate factory output to prevent overstocking.

“Despite attractive consumer offers, demand in the entry-level segment has remained tepid for several quarters,” a senior executive at a Maruti dealership told The Economic Times.

According to a July 1 report by Kotak Institutional Equities, Maruti’s domestic sales fell 4.5% year-on-year in the June quarter, driven largely by a sharp 36% drop in sales of its smallest models, The Economic Times reported.

The slowdown isn’t limited to Maruti. SIAM data released Tuesday showed that overall passenger vehicle sales in India fell 1.4 percent to 1 million units in the April–June period, ending a four-year growth streak.

Industry analysts quoted by The Economic Times said the near-term outlook for small cars remains weak, and automakers may need to revisit their product strategies to better match shifting buyer preferences.