New Delhi: India’s largest car maker, Maruti Suzuki India Ltd, posted a 14.6% increase in domestic sales last month from a year earlier, helped by a decline in the cost of automobile finance and increased demand in rural areas. That boosted sales for the year ended 31 March to a record.
Maruti sold 73,855 cars in India in March, taking sales for the year to 722,144 units—the highest annual count since it started selling its flagship Maruti 800 model in 1983. The annual dometic sales marked a modest 1.5% increase over the previous year.
Exports nearly doubled to 11,814 units in March. The newly introduced A-Star accounted for 8,000 units of the cars exported.
Maruti and Mahindra and Mahindra Ltd were the only car makers that posted increased sales in March. On Wednesday, Hyundai Motor India Ltd, the country’s second largest car maker, said March sales fell 15.8% to 24,754 units compared with the same month a year ago. Passenger car sales at Tata Motors Ltd fell 4% to 24,737 units.
Maruti’s performance was driven by the increased availability of automobile loans, lower cost of financing and demand for the A-Star, said Anup Maheshwari, an analyst at KR Choksey Shares and Securities Pvt. Ltd. Finance rates have fallen from 14.5-15.5% six months ago to about 12%.
Like all car makers, Maruti’s numbers, too, are based on dispatches to dealers but the company’s retail sales last month are believed to be on par with the dispatches.
March is generally a good month for car sales as companies can avail of depreciation benefits for cars purchased for their employees. Like all car makers, Maruti, too, had been battered by a sudden decline in car sales starting last October when it sold nearly 8% less cars than the same period the year earlier. In November, sales fell 27%, and in December 10.9%.
Faced with the sudden dip in volumes, the company decided to focus on targeted groups of customers to push sales. In a November interview with Mint, Mayank Pareek, Maruti’s executive officer, sales and marketing, said that the company would step up its marketing efforts with government employees, rural customers and corporate houses.
That strategy paid off. Rural markets make up 8.5% of total sales, up from 3.5% last fiscal, the company said in its conference call with analysts, according to an analyst who participated in the call and didn’t want to be named.
Meanwhile two-wheeler sales at Bajaj Auto Ltd fell by 15% to 132,640 units in March compared with a year earlier. Annual sales were down 11% to 1.9 million units. Suzuki Motorcycle India Pvt. Ltd said sales increased by 38% to 12,343 units in March compared to the same month last year.
General Motors Corp.’s India subsidiary reported a 26% decline in March sales to 5,001 units. Fiscal year sales were also down 4,898 units, or 7.9%.