Aided by a quick recovery in demand for entry level hatchbacks and utility vehicles, Maruti Suzuki India Ltd – country’s largest passenger vehicle manufacturer – on Saturday, reported a 1.8% year-on-year growth in domestic wholesale to 100,000 units in July. The company witnessed wholesale of 98,210 units in the year ago period.
Factory dispatches improved significantly from June when the company sold 51,274 units and just 13,865 units in May. Maruti restarted production operations from 12 May at its Manesar-based plant.
The growth in wholesale though comes on a very low base in the corresponding period, when the company had to reduce production due to falling demand for vehicles and transition to Bharat Stage 6 emission norms. Usually, Maruti manufactures around 1.5 lakh vehicles per month.
Volumes in the hatchback segment grew significantly by 49.1% y-o-y to 17,258 units while the same for utility vehicles also jumped by 26.3% y-o-y to 19,177 units.
Despite witnessing decent recovery in retail sales, automakers like Maruti Suzuki and others are struggling to ramp up manufacturing due to disruption in supply chain network. The prevailing lockdown in different states, rising covid-19 cases and increased inspection of imported parts from China have also caused major problems for auto makers and their suppliers.
Mint on May 8 reported that Maruti Suzuki plans to increase monthly car production to more than one lakh vehicles from July, on hopes that sales of affordable, entry-level hatchbacks will rebound thanks to a faster revival in demand in semi-urban and rural markets. The New Delhi based car maker is also likely to increase manufacturing of compact vehicles like Alto, Wagon R and Celerio.
Investors have been bullish about the prospects of Maruti in the near term since it is likely to benefit from a shift in demand towards small cars because of a quicker recovery in demand in the rural areas and increasing preference for personal mobility on fears of contracting infection.
Maruti’s exports dropped by 27% y-o-y to 6,757 units during the month.