With consumers delaying purchase decisions ahead of GST, the country’s largest carmaker posts flat sales in June. But going forward, Maruti can expect a rich harvest with demand for its SUVs set to burgeon.
01 Jul 2017 | 3495 Views | By Ajit Dalvi
Maruti Suzuki India, the bellwether of the Indian automobile industry, has announced its sales numbers for June 2017.
At 93,263 units in the domestic market, June 2017 sales are up 1.2 percent year on year. Clearly, consumers delaying purchase decisions ahead of GST has also impacted the country’s largest ...
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Maruti Suzuki India, the bellwether of the Indian automobile industry, has announced its sales numbers for June 2017.
At 93,263 units in the domestic market, June 2017 sales are up 1.2 percent year on year. Clearly, consumers delaying purchase decisions ahead of GST has also impacted the country’s largest carmaker as it has other OEMs.But going forward, the company can expect to harvest rich dividends given that other than the hybrid vehicle category, all other segments benefit from reduced taxation.
June 2017 sales, which dipped below the 100,000-unit mark, are the lowest yet for Maruti this year which has sold 133,768 units in January (+25.7%), 120,599 units in February (+11.5%), 127,999 units in March (+7.7%), 144,081 in April (+23.1%) and 130,248 units in May (15.1%).
Now, let's look at how the company’s sales moved, model-wise, in June 2017.
UVs help save the blushes
With overall passenger car sales at 69,970 units in June, down 3.6 percent YoY (June 2016: 72,551), Maruti’s utility vehicle sales of 13,879 units (+43%) compared to year-ago sales of 9,708 units, helped prevent the carmaker's overall passenger vehicle numbers from entering negative territory.
Demand for the entry level, bread-and-butter duo of the Alto and Wagon R dipped 7.9 percent at 25,524 units (June 2016: 27,712).
The company’s six compact cars comprising the Swift, Ritz, Celerio, Ignis, Baleno and Dzire sold 40,496 units, up 1.3 percent (June 2016: 39,971). The Ciaz premium sedan, which is now sold only from the premium Nexa channel, sold a total of 3,950 units, up 41 percent YoY (June 2016: 2,800).
The two vans – Omni and Eeco – sold 9,208 units, down 6.7 percent (June 2016: 9,874).
Sales of Maruti UVs (Gypsy, Ertiga, Vitara Brezza, S-Cross) rose 43 percent to 13,879 units (June 2016: 9,708). However, UV sales this June are the lowest for the carmaker this year, indicating that a good number of consumers have waited for GST to kick in and deliver sizeable price benefits, considering that UVs and larger cars are the biggest beneficiaries of the biggest tax reform ever attempted in the country.
Q1 numbers a building block for a record year
For the April-June 2017 period, the first quarter of 2017-18, Maruti sold a total of 368,431 units, up 14.3 percent YoY (Q1 FY2017: 322,340), indicating that the company is firing on all cylinders and well placed to cross FY2017’s total sales of 1.44 million units.
Sales data revealed by Maruti shows that other than slowing demand for vans, all other vehicle segments have fared well with double-digit growth coming their way.
Maruti model prices down by up to 3 percent
Earlier today, the company announced that that it has “passed on the entire benefit of GST rates on vehicles to its customers. The ex-showroom prices of Maruti Suzuki models have come down by up to 3%. The rate of reduction varies across locations depending on the VAT rates applicable prior to GST.”
However, pricing of the Ciaz SHVS and Ertiga mild hybrids has increased. As is known, hybrids have been heavily taxed in the GST regime and the SHVS-equipped Ciaz and Ertiga diesels get price hikes of Rs 188,000 and Rs 169,000, respectively, due to the increase in duty.
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