The country’s largest carmaker Maruti Suzuki India (MSI) today said it expects sales growth rate for the fiscal to be in low single digit as the Indian automobile market struggles to cope with rising interest rates and high fuel prices.
“Growth is very low this time. During festive season, we are expecting some boost in sales. However, due to huge base in last year, growth will be less. For the whole fiscal, we are expecting low single digit growth,” MSI Managing Executive Officer (Marketing & Sales) Mayank Pareek told PTI.
The company’s total sales declined by 7.1 per cent to 3,56,826 units in the April -July period this fiscal as against 3,84,181 units in the same period a year ago.
Domestic sales have also dipped 4.7 per cent to 3,17,187 units during the period, as against 3,33,001 units in the corresponding period last fiscal.
This is in contrast to the 24.81 per cent overall sales growth achieved by the firm to touch 12,71,005 units in 2010 - 11. Last fiscal, the company’s domestic sales jumped 30.08 per cent to 11,32,739 units.
Rising interest rates and high fuel prices have hurt consumer sentiments resulting in car sales rate slowdown.
Pareek said MSI has been going all out offering discounts “which is 22 per cent more than last year” and even tapping existing customers to exchange old cars in order to drive up sales.
“Exchange customers contribute a lot and it is always higher than the first time buyers. We are now trying to tap those buyers. However it came down recently due to interest rate hikes.
“About 26 per cent of our existing customers have home loans. So they defer exchanging their cars if there is a rate hike, which severely impacts the EMIs of their loans,” he said.
Pareek said every month about 90,000 customers come to the company’s service centres and MSI is contacting them to exchange their cars for new ones.
“We are giving them more offers,” he said but declined to elaborate on the details of the offer.