Diesel demand powers Maruti Suzuki, mini car sales slip
Maruti Suzuki's vehicle sales rose for the second straight month in February, after declining for seven months in a row till December. But it is not its bread and butter mini cars that are driving sales.
March 01, 2012 / 15:41 IST
Moneycontrol Bureau
Maruti Suzuki's vehicle sales rose for the second straight month in February, after declining for seven months in a row till December. But it is not its bread and butter mini cars that are driving sales. With a sharp rise in petrol prices an increasingly affluent middle class is now demanding more diesel powered premium hatchback Swift and the compact sedan Dzire.Maruti Suzuki's sales rose 6.5% year-on-year to 1,18,949 units in February. Compact car sales, which include Swift, Ritz and Estilo, surged 31.1% to 27,899 units. Dzire sales accelerated near 59% to 15,068 units. Investors cheered Maruti's continued sales recovery and the stock was up 4.2% at Rs 1,307.95 on NSE in afternoon trade on Thursday.Swift production was hit last year due to a labour unrest at Maruti's Manesar plant. However, with production returning to normalcy, sales are also back on track, helped by the new Swift launched in August and the new compact Dzire launched last month.Demand is so much that waiting periods for the Swift Diesel now stretch to as much as 7 months and 5-6 months for the Dzire, Shashank Srivastava, chief general manager (marketing) told moneycontrol.com. Even the Ritz diesel has a waiting period of 4-6 weeks.Diesel cars now account for around 25% of Maruti's total sales and 80% of new bookings are now for diesel cars, Srivastava said.But while Maruti Suzuki has gained leadership in the premium hatchback and compact sedan segment, its mini cars (which helped it become number one in the first place) have taken a hit. In February, sales of its mini cars, which include Maruti 800, Alto, A-Star and WagonR declined 8.2% to 49,104 units.Although the segment as such has seen a decline, Maruti has also been hurt by new launches by rivals. Hyundai, India's second largest passenger car maker, last year launched Eon to take on Maruti's Alto. Tata Motors has seen improved sales of the Nano, the cheapest car in the world, especially since the launch of the 2012 version towards the end of last year."There have been new product launches in the segment. But that apart entry level buyers are now also looking at the A2 segment (Maruti Swift, Ford Figo etc)," said Srivastava.Apart from the mini cars, sales of Maruti's sedan SX4 and Kizashi also took a hit in February. While SX4 sales slumped 42.5% year-on-year to 2,033 units, Kizashi sales were down 44% to 14 units. The demand for Swift and Dzire is so much that production of SX4 diesel has had to take a backseat, which shows in the lower numbers shipped to dealers, he said.Maruti Suzuki signed a deal with Italian car maker Fiat in January to augment supply of diesel engines. Fiat India will supply up to one lakh 1.3 litre diesel engines per year to Maruti for three years beginning Jan 2012 as per the deal.Nachiket Kelkar
nachiket.kelkar@moneycontrol.com Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
