Maruti Suzuki MD and CEO Kenichi Ayukawa (left) and the firm’s executive director, marketing and sales, Shashank Srivastava, during the launch of XL6 on Wednesday.
Maruti Suzuki MD and CEO Kenichi Ayukawa (left) and the firm’s executive director, marketing and sales, Shashank Srivastava, during the launch of XL6 on Wednesday.

Maruti sees new launches, govt steps putting sales back on track

  • Rollback of government plan to raise registration charges of new vehicles will boost sector, says automaker
  • XL6 will be offered with BS-VI compliant petrol engines in the price range of 9.79 lakh to 11.45 lakh

NEW DELHI : Maruti Suzuki India Ltd expects vehicle sales to recover in the forthcoming festival season buoyed by new product introductions and expectations of some favourable government decisions.

“At this stage, everybody is hoping that this festive season will be better than last year and at this stage, one can only hope. The new launches will not be able to turn the market around but will be able to make some changes," said R.C. Bhargava, chairman, Maruti Suzuki. “How the festive season turns out will also depend on some measures taken by the centre and state governments."

A roll back of the proposal of the Union government to raise registration charges of new vehicles within a few days will be a boost to the industry, Bhargava said.“The bigger challenge is the road taxes being imposed by state governments and that needs to be reviewed," he added.

India’s largest passenger vehicle maker on Wednesday launched new multipurpose vehicle XL6—a six-seater premium version of its existing Ertiga model. XL6 will be sold through Maruti’s Nexa chain of premium dealerships. Maruti is also expected to unveil a new model in the hatchback segment before Diwali. XL6 will be offered with Bharat Stage-VI compliant petrol engines in the price range of 9.79 lakh to 11.45 lakh.

India’s passenger vehicle industry reported its worst performance in five years in the fiscal year that ended on 31 March as higher fuel prices, increase in insurance costs, farm distress and lack of financing options following the Infrastructure Leasing and Financial Services (IL&FS) crisis kept buyers away. Vehicle sales during the festive months generally comprise a third of total vehicles sold in a particular year.

“We hope that the festive season will start the upward trend in the market. We are expecting a growth in demand in the domestic market. At present, we have an inventory of 30-35 days at our dealerships, which has come down in the past few months," said Shashank Srivastava, executive director, Maruti Suzuki.

Companies have lined up new product launches in an effort to woo customers during the coming festive season. BMW India launched the latest version of its 3 Series sedan on Wednesday, while Hyundai Motor India Ltd introduced Grand i10 Nios, a small car, on Tuesday. Kia Motors will launch its first product Seltos, a sport-utility vehicle, on Thursday, while Renault India will launch its seven-seater multipurpose vehicle Triber next week.

Automobile sales in India have been on the decline over the past nine months because of a sharp fall in consumption demand and an increase in ownership cost after the introduction of new safety features, higher insurance costs and the shift to BS-VI emission norms. In July, Maruti’s wholesale vehicle dispatches plunged 36% when the total number of vehicles sold fell below the 100,000 mark for the first time since June 2017.

Maruti’s vehicle dispatches during April-July 2019 fell 23.2% year-on-year to 617,992 units.

“The pre-festive period sales have remained weak and largely below industry expectations. This has led to a reduction in production days across original equipment manufacturers to rationalize inventories," said Nishant Vass, research analyst, ICICI Securities. “Discounting trends could intensify in second and third quarter as consumers may delay purchase decisions with imminent BS-VI transition."

Vass said, however, an “improvement in monsoon (turned to 2% surplus till Jun-Sept 2019) is likely to support rural sentiment amidst possible policy support from the government".

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