Maruti bucks industry slump

At a time when auto analysts are expecting flat to negative growth for the industry for 2008-09, Maruti Suzuki India (MSI), the country's largest passenger car manufacturer, registered a growth of 3.6% (including exports) in 2008-09 at 7,92,167 units (highest ever in its history) as compared to 7,64,842 units in the previous year. This has been mainly driven by new models and higher focus on rural India.
In the domestic market, sales of MSI went up by 1.5% in 2008-09 at 7,22,144 units as compared to 7,11,818 units in the preceding financial year while its exports jumped by 32.1% at 70,023 units' vis- -vis 53,024 units in 2007-08.
The growth came even on a month-on-month and year-on-year basis, courtesy the two stimulus packages that were announced by the Centre in December and January. Sales were higher by 4.57% in March vis- -vis February at 70,625 units and the same went up by a robust 14.64% as compared to 64,421 units in March last year. "The period 2008-09 was a difficult year and we were only expecting a decline from June onwards when the sentiments started moving in the negative territory. However, the confidence started coming back since December after the Centre and the Reserve Bank intervened with stimulus packages that resulted in lower interest rates, lower prices and higher affordable credit," says Ajay Seth, chief general manager, Maruti Suzuki India. He added that barring some models, car prices have come down by 10-11% now as compared to their prices at the beginning of April.
"On top of this, funds from the Sixth Pay Commission came in and fuel price eased to levels beyond expectation. This boosted the consumer sentiment and those who were deferring purchases till then finally decided to buy a car," he adds.
However, Rakesh Batra, national leader (automotive practice), Ernst and Young, feels 2008-09 volumes for any player are not what was anticipated by players on the backdrop of high double digit-growth over the last few years. "The passenger car industry had registered a compounded growth of 17% since FY'03 to FY'08. Even if 2008-09 ends up at 2-3%, it would be a decline of around 15%," he said. After September last year, MSI's sales in October, November and December declined by 7.1%, 27.4% and 10% respectively. In January and February, sales, however, rose by 5.39% and 24.08% respectively.
Growth path
and#149; Maruti registered a growth of 3.6% (including exports) in 2008-09 at 7,92,167 units (highest ever in its history), as compared to 7,64,842 units in the previous year
and#149; In the domestic market, sales of Maruti Suzuki went up by 1.5% in 2008-09 at 7,22,144 units