New Delhi: India’s top car maker Maruti Suzuki raised its sales forecast for the current fiscal year on surging demand in Asia’s third-largest economy, despite a maintenance shutdown that would create a dip in December sales.
Maruti, 54.2% owned by Japan’s Suzuki Motor, expects sales this fiscal year to rise 31% from a year earlier, chief executive Shinzo Nakanishi told reporters on Wednesday.
Nakanishi said the company’s production in December is likely to be lower than November, citing a seasonal plant shutdown for maintenance.
The forecast is higher than Maruti’s estimate in September, when it said it expected to sell 1.2 million vehicles in fiscal year 2011, up nearly 18% from last year.
The company sells roughly half the cars in India, where a burgeoning middle class in an economy growing at nearly 9% a year is creating a boom in demand for vehicles.
Maruti faces intensifying competition from the likes of South Korea’s Hyundai Motors, the second-largest car maker in India, and Ford Motor as well as domestic rivals in India, where the automobile industry is likely to grow by 18 to 20% this fiscal year.
Maruti’s sales in November rose 28% to 112,554 units, despite a 12% drop in export volumes.
The automaker plans to invest $1.3 billion over the next three-year on manufacturing plants to boost capacity. Earlier this year, the company said it would build a fourth auto plant in India to lift output to 1.5 million units a year.
The new factory would start operations in 2013, with annual capacity of 250,000 cars.
Annual production is expected to reach 1.85 million units by the end of 2012, Nakanishi said.
Shares in Maruti slipped after news of the likely lower December sales, falling as much as 3.2%. At 02:30 pm, the stock was down 2.8% at Rs1,388.20 in a weak Mumbai market.