With passenger car sales declining since the past two months, the auto industry has witnessed the slowest growth period since as much as two years, following increased fuel and interest rates. Following the sluggish growth in the Indian auto industry, India’s largest car manufacturer, Maruti Suzuki India recently announced they expect their sales growth this fiscal year to be in the single digit.
Mayank Pareek, MSI’s managing executive officer of sales and marketing said that this time growth is quite low. In the festive season, however, they are expecting this growth to pick up. Although, due to their huge sales figure last year, in comparison this year’s sales will be quite less. They are expecting growth to be in a low single digit for this whole fiscal year.
The overall sales of the company decreased to 3,56,826 vehicles, a drop of 7.1% in the period of April to June, in comparison to the 3,84,181 vehicles sold in the corresponding period last year. The company’s domestic sales also decreased to 3,17,187, a drop of 4.7%, in comparison to the 3,33,001 vehicles it sold in the domestic market in the corresponding period last year. This was in contrast of the 24.81% total sales growth that the company had achieved in 2010-11 to reach 12,71,005 vehicles sales. In the last fiscal year, the domestic sales of the company increased to 11,32,739 vehicles, a growth of 30.08%.
Pareek also said that the company was offering a lot of discounts that is 22% higher that what they offered a year ago, as well as reaching out to existing customers for exchanging their old cars to increase sales. He also added that these customers also made a significant contribution, which was greater than that contributed by new buyers. They are also trying to attract new buyers, a plan that was affected because of the hike in interest rates.
Around 26% of their current customers already have home loans, so they won’t go for the exchange car initiative if the interest rates are hiked that can had a significant impact on their loan EMIs. He also stated that around 90,000 customers visit their service centres monthly, and the company was contacting them in a bid to get them to exchange their old cars in favour of new ones. He said that they were providing them with more offers.