July has been a dull and damp month for car sales in India. Rising petrol prices combined by rising interest rates made sure that the Indian market met with a decline of 16% as compared to July last year.
Every manufacturer took a hit on their sales figures. Of course, the bigger players got hurt more than the smaller ones. Maruti Suzuki, the largest player in India in India was hurt quite badly.
Maruti Suzuki sold only 75,300 vehicles in July compared with 100,857 units a year earlier. Because of the decline in sales the company’s dealers had an inventory pile up leading to a lot of funds being stuck in operating cost.
Maruti Suzuki finally decided to cut the production of its high volumes models such as Alto, WagonR, Estilo and Ritz to rationalize the inventory. To keep the inventory at normal levels, Maruti has tweaked production plans.
This is the highest drop in car sales in the last two and a half years. However, Maruti Suzuki believes that this is only a short term decline and the demand will catch up in the festive month of September. The company has enough inventories to cope up with the festive demand.
Maruti has lined up three products – Swift, Swift Dzire and R3 MPV for the next six months for introduction.
The big daddy of the Indian car Industry is flexing its muscle to gain back what it has lost in the last couple of years. Maruti Suzuki has been facing intense heat from the competitors in the past few years. Although, it has successfully managed to retain the top spot, the competition is only going to get stiffer. Clearly, this is no time to fold your hands and follow the ‘wait and watch’ strategy.
The major reason where Maruti is loosing out on is product launches. The last launch from Maruti Suzuki was the Kizashi in February 2011 and the product bombed quite badly. So Maruti Suzuki has decided to opt in for a ‘hands on’ approach in the market. By that we mean, it is investing a whopping 3,000 crores in 2012-13 financial year on various areas, including expanding capacity and new model launches.
The few products that are expected from Maruti’s stable over the next couple of years are:
New Swift (on August 17, 2011)
New Swift Dzire which will be based on the new Swift but will be shorter than the current Dzire.
R3 MPV to challenge the Toyota Innova
Small car below the Wagon R by end of 2012
Next generation SX4 in 2013
A-Star facelift by 2013
Ritz facelift by 2013
These are the product that we are 100% sure of. Of course, there will be some facelifts and a few ‘special edition’ models (read stickered models) in the pipeline as well which cost a few bucks to
Of course, after developing these models, MSIL needs to build them at some place. So they are investing about Rs 4,000 crore in this fiscal primarily on setting new assembly lines inside its Manesar facility with an annual capacity of 2.5 lakh uints. The company is also increasing the production capacity of diesel cars to 2.9 lakh units annually from existing 2.4 lakh units.
By the looks of it, Maruti Suzuki is certainly stepping on the right stones for the future.
The ‘Big Car Churning’ machine has finally hit the brakes. Maruti Suzuki, after 2 years of dominating growth, has experienced a decline in sales because of labor strike that hit the company in June. Maruti last showed a drop in sales in December 2008.
The ‘Small Car’ czar had to stop production for 11 days as 2,000 workers at the Manesar went on strike because their demands of recognizing them as a new union was not met. Maruti Suzuki suffered a loss of 93 million dollars and 12,500 units of different models were not produced at all.
Initially, when the strike began, the company said that it had enough inventories to factor in the strike but later Maruti Suzuki chairman RC Bhargava announced that there will be ‘a considerable delay’ on all the diesel models. The launch of the new Swift was also delayed because of the same strike.
Adding to the misery, the company had to shut its plant for the next 6 days for annual maintenance of the machinery. That’s a total of 16 days of no production at all!
Further, the passenger car segment also showed signs of a slowdown with only 17% growth as opposed to 31% last year in the same period. So a ‘triple shock’ meant even the biggest automaker had to drop its weapons. Although, this decline will be temporary one as production has resumed in full swing. Maruti will bring the new Swift, new Dzire and R3 MPV to the market next.
It’s not the first time we’re hearing about auto manufacturers reaching out to Gujarat for putting up a plant. We’ve heard stories about Hyundai and Ford’ interest in investing in Gujarat last year. Tata Motors produces Nano from Sanand while GM India rolls out vehicles from Halol, both places situated in Gujarat. The new company to join the Modi-led Gujarat bandwagon is Maruti Suzuki. DNA Money reports that a delegation [ Read More ]
Our eagle-eyed reader Siddhant Jain followed the new Swift during a round of city testing in Delhi with a camera last week. IAB readers would be aware that we have posted a video of the mule undergoing tests along with exclusive spy shots earlier in the year.
According to a newspaper report, production of the new Swift at Manesar will begin in the next couple of months and will be launched either during the end of July or the beginning of August. The report adds that the company will increase production so that the Swift can inch past the i10 (from the current 13k units to up to 17k units in August) to become the best seller in its segment.
The new Swift will be launched with the same 1.3-liter Multi-jet diesel engine and the 1.2-liter K Series engine which may be fitted with variable valve timing technology.
Its been less than a month since the Maruti Suzuki diesel was announced and prior to the launch questions were raised on how the SX4 could compete with powerful offerings that will occupy this segment in the next few months. But things have turned out to be profitable for Maruti Suzuki who has registered over 5,000 bookings for the diesel model. Shashank Srivastava, Chief General Manager, Marketing, Maruti Suzuki India [ Read More ]
If you are a ‘Cricket-and-Car enthusiast’ and you have just read our first look on VW Vento IPL edition model, you might think that the choice of car is quite obvious for you. Well, as it turns out, you are also spoiled for choice. When Maruti boffins realized that VW is encroaching on their ‘Special Edition’ strategy, they got very angry. And in this anger and hatred, they decided to [ Read More ]
Maruti’s Kizashi sedan might have exceeded the sales targets, but Maruti’s not the one taking a back seat. Promotional plans have been drawn up and an advertisement campaign will be aired during the ongoing World Cup. Maruti has spent 8 crore rupees on the Ad campaign. Dentsu is the Ad agency. Maruti is presently airing “Value for money” ad along with SX4 Diesel ads at the end of every over. [ Read More ]
July has been a dull and damp month for car sales in India. Rising petrol prices combined by rising interest rates made sure that the Indian market met with a decline of 16% as compared to July last year.
