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Informist, Monday, Jun. 2, 2025

 

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--Maruti Suzuki: Top three models sold in May were made by co 
--CONTEXT: Comments by Maruti Suzuki mgmt at press conference 
--Maruti Suzuki: Hope of better monsoon good for co, given rural presence 
--Maruti Suzuki: Now offering six airbags in entry-level cars as well 
--Maruti Suzuki: Aggressive export plan protected us amid falling local demand 
--Maruti Suzuki: India-Pakistan skirmish had bearing on May despatches 
--Maruti Suzuki: Car despatches won't grow until small-car market grows 
--Maruti Suzuki: Engaging with India govt on China rare earth magnet issue 
--Maruti Suzuki: Govt must give incentives to boost small car sales 
--Maruti Suzuki: Sentiment in urban market is not positive 
--Maruti Suzuki: See enquiries for small cars, problem is their conversion 
--Maruti Suzuki: Inventory level at dealerships across India 35 days now 

 

By Anand JC

 

NEW DELHI – Maruti Suzuki India Ltd. on Monday flagged the falling demand for automobiles in India owing to a regulation-led drop in small car sales. Despatches of automobiles in May remained largely flat, but that figure would have contracted if not for the new product launches, the company's executives said in a virtual press conference.

 

The company was addressing reporters hours after it announced its automobile sales for May. Maruti Suzuki, India's largest passenger vehicle maker, sold 180,077 units in May, up 3% on year, largely driven by export sales which grew 80% on year. Its passenger vehicle despatches fell 6% on year. The company said the recent India-Pakistan skirmish played a role, given its high presence in tourism-driven regions like Punjab, Jammu, and Kashmir. 

 

Another reason why Maruti Suzuki's India despatches fell in May is calibration of supplies to its dealers, the company said. The company decided to stop increasing the network stock at dealerships, given where the industry is right now. Maruti Suzuki said its inventory level at dealerships is currently 35 days across India. 

 

Despite the fall in demand for cars, Maruti Suzuki said the top three models sold in May across India were made by the company. Without naming the models, the company said these three models included a multipurpose vehicle, sport utility vehicle, and a sedan. Maruti Suzuki said that its strategy of aggressively pushing for exports towards de-risking its business plan has paid off well. This strategy protected the company's overall wholesale sales in a situation where domestic sales continue to fall. 

 

Maruti Suzuki has stepped up its exports to the Japanese market in recent months. The top models being sold overseas by Maruti Suzuki include the Fronx, Baleno, Dzire, and the Jimny. 

 

AFFORDABILITY ISSUES

While prospects abroad continue to be encouraging, Maruti Suzuki's management reiterated that the overall market won't be able to grow unless the small car segment grows. And the small car segment is currently under pressure due to affordability issues caused by high regulations which are forcing companies like Maruti Suzuki to increase prices.

 

"Even if I talk about the entry-level cars today, I think enquiries, there is not a problem. Problem is the conversion part of it. Because many of these customers...they are not able to get the finance done," a Maruti Suzuki executive said.   

 

The company suggested that the government offer sops in order to encourage sales of small cars. In addition, some support could help two-wheeler owners to upgrade to a safer four-wheeler. Regulatory measures have been aimed at increasing the safety features provided in a vehicle. 

 

Maruti Suzuki said it is now offering six airbags across all variants of nearly 97% of its models. "We are trying to educate the customer to show the value of how this six-air bag, how the safety makes a difference. We are doing our part on such a fight. Let us see how we are going to bridge this gap, because affordability cannot be only the responsibility of the OEM (original equipment manufacturer)," the company said.

 

Maruti Suzuki now sells nearly 50% of its cars in rural India, and a similar quantum in the urban area. The company expects to "reap good dividend" in the rural areas, given the forecast of a good monsoon season this time. However, the management said that the sentiment in urban India is "not at all positive", given the low sales of small cars in those areas. Even within the in-demand utility vehicles space, despatches are contracting in older models, Maruti Suzuki said.

 

Automobile companies, including Maruti Suzuki, are currently in talks with the Indian government over the rare earth magnets imports from China. To procure this raw material, an essential part of electric vehicles, China has asked importing companies for an end-user certificate which has to be endorsed by the Indian government and approved by the Chinese government.

 

For the March quarter, Maruti Suzuki reported a net profit of INR 37.11 billion on revenue of INR 406.74 billion. At 1237 IST, its shares traded at INR 12,283 on the National Stock Exchange, down 0.3% from the previous close.   End

 

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Edited by Deepshikha Bhardwaj

 

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