Maruti Suzuki small car sales drop, to launch CNG models and SUVs

With gasoline small car/hatchback buyers being affected and others opting for SUVs, Maruti Suzuki India Ltd will expand its CNG-powered models and SUVs, Maruti-Suzuki chairman RC Bhargava said Friday.

He also said the small car segment, which was about 70 percent for the company, will drop to about 65 percent, which is also a significant size.

Speaking to reporters, he noted that there has been a degrowth in the small car hatchback segment, while the SUV segment has seen significant growth.

“Next year there will be degrowth in the hatchback segment. The purchasing power of the hatchback segment has been degraded and so is not growing. Production capacity will fall from 70 percent to what the market needs,” said Bhargava.

Nevertheless, hatchbacks are still a big part of Maruti Suzuki’s business.

According to him, the decline in the small car market started three years ago and inflation will make this market segment even worse.

He said the change in the composition of sales – decrease in small cars and increase in SUVs – is due to the different price increases.

Maruti Suzuki’s market share, which was 51 percent in 2019, fell to 41 percent in September.

Bhargava disagreed that the company was too late to enter the electric vehicle segment – it plans to launch its model in 2025 – even now that Tata Motors has launched a mass-market model.

“We are locating the components, looking at infrastructure development in the country. An electric vehicle customer should not have any problems,” he said.

Asked about the stock building of the small cars, Shashank SrivastavaSenior Executive Director, Marketing & Sales said there’s been a bit of build-up because there’s a mismatch between supply and demand.

He disagreed that the increase in compressed natural gas (CNG), prices will lead to increased demand for diesel-powered models.

Srivastava said the diesel segment remains at 18 percent and that CNG remains a good economic option over petrol and diesel vehicles.

He said Maruti Suzuki will launch more CNG-powered models based on the waiting time for the existing ones.

On the SUV front, Bhargava said Maruti Suzuki will expand its offerings and newer models will be showcased at the upcoming AutoExpo.

Asked about the impact of the depreciation of the rupee against the dollar, he said that the depreciation of the Indian currency is much less compared to other currencies.

The rupee has strengthened against the yen, making imports cheaper for Maruti Suzuki.

Bhargava said the company is targeting two million units this year, although the biggest challenge is the supply of semiconductors.

Regarding the used car segment, Srivastava said that the number of used cars has decreased.

Meanwhile, the company posted an operating revenue of Rs 29,930.8 crore and a net profit of Rs 2,061.5 crore for the quarter ended September 30, 2022.

For the corresponding period of the previous year, Maruti Suzuki’s total operating income was Rs 20,538.9 crore and net profit of Rs 475.3 crore.

During the quarter under review, the company had sold 517,395 vehicles – domestic 454,200 units, export 63,195 units.

A shortage of electronic components impacted the production of approximately 35,000 vehicles in the quarter.

The same period of last year was marked by an acute shortage of electronic components and as a result, the company was able to sell a total of 379,541 units, of which 320,133 units in the domestic market and 59,408 units in the export markets.

Pending customer orders totaled about 412,000 vehicles at the end of the quarter, of which about 130,000 were pre-booked vehicles for recently launched models, the company said.


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