Swaraj Baggonkar Moneycontrol News
Maruti Suzuki, the country’s largest car maker, said it is on track to achieve the targeted double-digit growth this financial year despite flat sales in July.
The Delhi-based maker of top-selling models like Swift, Baleno and Dzire saw a drop of 0.6 percent in domestic sales of passenger vehicles on the back of a high base of July 2017 when GST was implemented.
Speaking to Moneycontrol, R S Kalsi, senior executive director, Maruti Suzuki India, said, “Demand is in place and customers are coming forward. Some bit of seasonality happens in India — monsoon season, cities are flooded — but otherwise, the demand story is fine. Waiting period is two-three weeks on Swift and Dzire, while it is four weeks for Baleno. Production is ready to support the guidance of double-digit growth announced by the company."
Companies and their dealer partners had to destock inventory during June due to GST implementation in July followed by restocking in July. This is the reason behind the high base of July 2017. The other reason behind low growth in July 2018 was the weeklong trucker’s strike that hit shipments of vehicles.
Maruti Suzuki clocked sales of 152,427 units during last month as against 153,298 units sold in the same month last year. Hyundai’s sales grew by one percent while that of Mahindra & Mahindra and Toyota dropped by six percent and 23 percent last month, respectively.
Tata Motors and Honda remained the outliers, posting growth of 14 and 17 percent respectively, thanks to strong demand for new models such as Tata Nexon and Honda Amaze.
“Though growth in percentages is flat, it is a highly deceptive figure to go by. Maruti’s volume is more than 1.52 lakh, which is a very high volume by any standard. It is also that this growth is coming on a high base of last year’s July. And last year June sales were low when we sold 1.34 lakh vehicles and still we had a growth of 45.5 percent. June and July sales have to be put together to see the correct picture and the growth there comes to 17 percent," added Kalsi.
This month will see the launch of the facelifted Ciaz, which will replace the existing model that competes against the Honda City and Hyundai Verna. The company had to destock the sedan’s inventory from its channels before dispatching the new version.
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