Swaraj Baggonkar Moneycontrol News
The country’s largest car maker Maruti Suzuki on December 19 said a large portion of its product range will be moved to the next emission standard Bharat Stage VI by December 2019, much ahead of the sales deadline set by the government.
Top executives of the Delhi-based company said a major chunk of the product range will be migrated to BS-VI, three months before April 1, 2020 date set by the government.
RC Bhargava, Chairman, Maruti Suzuki said, “BS-IV vehicles cannot be registered after March 31, 2020. Our plan is to time our model introduction accordingly so all our new products will be BS-VI and our existing models will also have to be converted and broadly the production of BS-IV vehicles, not entirely, but largely will come to stop by December 31, 2019.”
The production of BS-IV grade vehicles will continue after December 31, 2019, but in limited numbers.
“We may still produce some BS-IV vehicles after the date if there is a customer demand but we don’t expect it to be large numbers. Barring one product all others will be moved to BS-VI before December next year," added Bhargava.
Other car makers are reviewing their marketing and sales schedule to be in line with the retail demand during the final months of implementing BS-VI. Mahindra and Mahindra, for instance, may also follow a similar production schedule as that of Maruti Suzuki.
After the nationwide introduction of BS-VI standards, demand for diesel cars is expected to come down sharply. According to Bhargava, the price gap between petrol and diesel variants of a model may get stretched to Rs 2.5 lakh from about Rs 1 lakh at present. Diesel emission will be under a tighter regime under BS-VI than BS-IV.
Talking about the company’s performance so far this year Bhargava said the company hopes to close the year with 8 percent sales growth even though sales in the first half grew 10.5 percent. Maruti had committed a double-digit growth at the start of the year. While Q3 sales is expected to be flat the final quarter is expected to generate an increase of 5-6 percent.
“We have done an analysis of past numbers. During the past 2-3 election years sales always fell in the pre-election year. But sales go up substantially during the election year. We do not know if sales will go up next year as well,” said Bhargava.
With a planned week-long shut down of its factories later this month inventories across Maruti Suzuki’s dealerships are expected to go down.
This coupled with a ramp-up in production of the revamped Ertiga that the company launched a few weeks ago and a new launch in the final quarter will help boost wholesales (company sales to dealers).
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