With sales of 106,414 units in December 2016, down 4.4% (December 2015: 111,333), the cash crunch has not spared even the country’s largest carmaker which was considered to be less impacted as it has plenty of Baleno and Brezza bookings in hand.
01 Jan 2017 | 15461 Views | By Autocar Professional Bureau
Maruti Suzuki India, the bellwether of the Indian passenger vehicle industry, has recorded a year-on-year sales decline of 4.4% in December 2016 with 106,414 units going home to new car buyers (December 2015: 111,333). Clearly, the cash crunch has not spared even the country’s largest carmaker.
The December 2016 ...
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Maruti Suzuki India, the bellwether of the Indian passenger vehicle industry, has recorded a year-on-year sales decline of 4.4% in December 2016 with 106,414 units going home to new car buyers (December 2015: 111,333). Clearly, the cash crunch has not spared even the country’s largest carmaker.
The December 2016 numbers results are contrary to what the company was expecting for the month. On December 23, Maruti car bookings were reported to be higher by 7 percent compared to the same period in December 2015.
UVs and Ciaz prevent higher percentage of decline
What is worrying for Maruti is that the bread-and-butter duo of the Alto and Wagon R, which sold 31,527 units in December 2016 (December 2015: 37,234), down a sizeable 15% YoY, is bearing the brunt of the cash crunch, which has come about after the government initiated the demonetisation exercise on November 8, 2016. While Maruti’s November numbers were in the black for that month, those numbers could be a result of the festive season of Diwali.
If that’s not bad enough, sales of the compact car quintet of the Swift, Ritz, Celerio, Baleno and Dzire are also down – at 43,295 (December 2015: 47,354), down 8.6% YoY. The Dzire Tour, which is sold only as a taxi, sold 2,559 units (December 2015: 3,614), down 29% YoY. Even the two vans – Omni and Eeco – which usually give a fillip to overall sales numbers are down 17% to 9,224 units (December 2015: 11,122)
The carmaker would have posted a higher level of YoY sales decline if it weren’t for the smart performance of its UVs (Gypsy, Ertiga, S-Cross, Vitara Brezza) and the Ciaz premium sedan. Thanks to surging demand for the Vitara Brezza compact SUV, Maruti’s UV sales soared 75% YoY to 16,072 units (December 2015: 9,168).
For the fiscal year till date (April-December 2016), Maruti Suzuki India has sold a total of 971,958 units, which is a 9.3% YoY growth. The company had recorded toal cumulative domestic sales of 1,305,351 units in FY2015-16. The sales target for FY2016-17 is around 10% growth, which translates to 1,435,886 units. Will the carmaker achieve it?
It is understood that the Budget for FY2017-18, to be announced on February 1, 2017, will be a consumer- and industry-friendly one. If that is the case, it might give a fillip to PV sales. Also, the currenty heavily-strapped-for-capacity Maruti will see its all-new Gujarat plant go on stream in early February, rolling out at least 10,000 units by end-March 2016.
Although most automakers were loathe to admit it in November, the demonetisation exercise and the resultant aftermath of the cash crunch are set to inflict further pain in the months to come. If Maruti Suzuki, which was considered to be less impacted because of the large number of bookings it has in hand for the popular Baleno hatchback and Vitara Brezza SUV, has seen its numbers decline by nearly 5,000 units last month, expect most passenger vehicle manufacturers to report similar if not a higher percentage of sales declines. Stay tuned for further industry updates.
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