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Last Updated : Jan 25, 2019 07:58 PM IST | Source: Moneycontrol.com

Maruti Suzuki discounts at all-time high, but Ertiga has 7-month wait period

The maker of Swift and said average discounts per vehicle in the December quarter stood at Rs 24,300, 30% higher than second quarter

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The 17 percent profit slide of Maruti Suzuki during the third quarter was accompanied by all-time high discounts highlighting buyer sentiments that continue to remain weak even into the new year.

The Delhi-based maker of Swift, Dzire and Baleno said average discounts per vehicle for the December quarter were at Rs 24,300 or 30 percent higher than the second quarter when average discount per vehicle was Rs 18,750.

“The average discount per vehicle during the nine months ended December was Rs 19,200. Discounts during the third quarter were Rs 24,300 per vehicle. But competition discounts were higher than what we were offering. Q3 was an exceptionally challenging period,” Ajay Seth, Chief Financial Officer, Maruti Suzuki said, speaking to analysts post the announcement of quarterly results.


Owing to lesser-than-expected retail demand during the festive period Maruti Suzuki reported just a 1.3 percent rise in domestic volumes to 405,597 units. This is the reason why the company hiked discounts significantly during the third quarter to get rid of high inventory.

Officials further said retail demand has not picked up even with the start of a new calendar year.

“Markets remain under pressure. Few streaks of optimism which we can see are that being election year people will be spending more given the higher MSP (minimum support price) plus monsoon of last year had been good. Fuel prices have also come down from their peaks. (But) overall pressure continues and growth is still subdued,” said RS Kalsi, Executive Director Sales and Marketing, Maruti Suzuki.

At the start of the current financial year, Maruti Suzuki had forecast double-digit volume growth. However, it had to revise projections and settle for high single-digit growth. During nine months so far, the company has clocked 8 percent domestic volume growth at 1.32 million units.

Maruti’s growth has beaten the industry growth rate of around 4 percent as against the forecast of 8 percent. The industry is expected to close the year with a 4.5 percent growth compared to last financial year.

The silver lining for Maruti Suzuki is the robust booking numbers it has received for its two new launches – Ertiga and Wagon R. As per the management, cumulative bookings for Ertiga has surpassed 55,000 and for Wagon R the bookings have crossed 14,000.

“Both the Ertiga and Wagon R have been well received. The waiting period on the Ertiga is 28 weeks. There is no production constraint on the Ertiga, we will gradually scale up its production,” added Kalsi.

The face-lifted Ertiga was launched in November while the all-new Wagon R was launched earlier this week.
First Published on Jan 25, 2019 07:58 pm