Maruti readies for festive celebrations but with caution

Despite an accelerated sales run in the Covid era, automobile major Maruti Suzuki is still cautiously optimistic about offtake prospects during the upcoming festive season.

Traditionally, the festive period is regarded as the prime sales season in India with brands focusing on new launches and shoring up offtake performance.

However, Covid-19’s impact is expected to diminish some of the vigour during this season.

Nevertheless, low base, rising rural consumption and somewhat urban demand shoots are expected to drive growth.

“We are optimistic about the festive season sales,” Maruti Suzuki India’s Executive Director for Marketing and Sales Shashank Srivastava told Media.

“A caveat here is that this time there could be headwinds because of the Covid sentiment downside. So our optimism is muted a bit because of this.”

Lately, a sustained trend in pent-up demand along with slow-but-sure acceleration in economic activity has led to higher automobile sales in India on a sequential basis.

Last month, the auto major posted a rise of over 30 per cent in its total sales.

Accordingly, the company’s total sales rose to 160,442 units in September 2020 from 122,640 units sold during the corresponding month of last year.

Similarly, in August, the auto major had reported a year-on-year rise in total sales.

Its overall offtake in August had risen by 17.1 per cent in total sales to 124,624 units from 106,413 units sold during the corresponding period of 2019.

Besides, it has stocked up inventory at dealerships for what just might turn up to be the healthiest festive season in terms of sales.

“Our dealers are well prepared for taking care of consumer demand and have replenished their stocks which was made possible by the improved production levels in September,” he said.

Even though the festive season sales trend might be a bit dicey, the company is optimistic about its long term India prospects.

In its Annual Integrated Report for FY20, the company had pointed out that India’s long-term economic prospects are promising which augur well for the automobile business.

It cited the economy’s resilience during the financial crisis and predicted that revival might be faster in India this time as well.

Recently, the automobile major had launched the all new S-Cross Petrol with a starting price of Rs 8.39 lakh.

Maruti Suzuki has two manufacturing facilities in India. The Gurgaon manufacturing facility has three fully integrated manufacturing plants and is spread over 300 acres. The Gurgaon facility manufactures the Alto 800, WagonR, Ertiga, XL6, S-Cross, Vitara Brezza, Ignis and Eeco.

The Manesar manufacturing plant was inaugurated in February 2007 and is spread over 600 acres.