Close on the heels of Mahindra & Mahindra (M&M) affirming that the semiconductor crisis is getting abated, a senior Maruti Suzuki official has also maintained that the easing supplies of chips is aiding a gradual recovery in the company’s monthly output. However, he was categorical that the semiconductor supplies have reached 95 percent levels and not 100 percent and the situation may remain the same for the entire second quarter of FY23.
Shashank Srivastava, senior executive director, marketing & sales at Maruti Suzuki India Limited (MSIL), told reporters, “There seems to have been a progressive improvement on the supply side because of the improved situation on the semiconductor front. In September (last year), production level was only 40 percent, in October it inched upwards at 60 percent, in November it was about 85 percent, in December it was 90 percent. Then in January-Feb (this year) it was 91 percent, in March-April it was 92-93 percent, May-June-July it was 95 percent. As you can see from 40 percent to 90 percent it seems to be a good improvement.”
When asked when the company expects 100 percent production levels, Srivastava added, “We do not have the visibility of the availability of semiconductors in the future. We keep getting updates very week and keep modifying our estimate. One thing I can tell you is we will not see 100 percent normalization of production. So, for August, and it appears for September, it will not be 100 percent. Going forward, will it be 100 percent (or not) is something I cannot with certainty because it is the global chain which is involved. It is very complex for us at the moment to tell you about the future numbers. Therefore, I am little apprehensive to give you the timeline.”
Srivastava was speaking to reporters on the sidelines of Maruti Suzuki launching the next generation Alto K10, which is available at a starting price of Rs 3.99 lakh that goes up to Rs. 5.83 lakh for the top end variant. Earlier this week, MSIL also commenced bookings for this hatchback for a token amount of Rs 11,000 and deliveries are likely to begin soon. Designed and developed locally at its R&D centre in Gurgaon, the new K10 variant will be retailed along with its Alto 800 variant at Maruti Suzuki Arena showrooms.
“Out of the 11,52,000 hatchbacks sold last year, Maruti Suzuki sold 788,000 units thus cornering 68-69 percent of the hatch market. Our total hatch sales last year is equal to the number of 2 and no 3 sales put together. Furthermore, the top 4 models of the industry have always been hatches. Another perspective is that our last year’s Alto sales of 146,000 units is higher than the sales of any SUV models in the country. So it is an important segment for us, since there is an economic logic to it as a lot of people come as first time buyers, which has been 50 percent over the last 25 years because of our demographics,” said Srivastava.
It was also revealed by Maruti Suzuki that in the last six years, the overall hatchback market was about 45-46 percent of the total PV market. While minicar segment's contribution was consistent at about 22 percent, the premium hatch accounted for another 20 percent. It was only last year that the minicar segment's share went down to 18 percent, as per the company.
When asked about the sales target for this model, Srivastava revealed, “Historically, we used to sell 75,000-80,000 units per annum. We should be able to replicate those numbers and can even garner incremental volumes if the passenger vehicle market further improves.”
While Maruti Suzuki has no plans to launch an electric or hybrid variant of this model, a CNG-powered Alto is expected in the next few months.
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