Expect better sales due to improved sentiment: Maruti

Maruti Suzuki India (MSI) expects next few months to be better in terms of sales as compared with first half of 2019-20, as it sees improvement in buying sentiment with clarity on various policy issues including GST rates, and prospects of a good Kharif crop, a top company official said on Monday.

The country's largest carmaker, which saw its market share go below 50 per cent in April-August, is counting on festive season, S-Presso launch and revival of demand in the rural segment to ease some pressure on the sales front.

"It is quite difficult to tell (if sales have revived). We would try to catch up on volumes, that is very important because the first six months saw very low demand. We are expecting (revival) but it takes time," MSI Managing Director & CEO Kenichi Ayukawa told reporters here.

Sales were better this month as compared with August and the company expects October volumes to be even better than September, he added.

Elaborating further, MSI Executive Director (Marketing and Sales) Shashank Srivastava said with uncertainties around GST rates and BS IV vehicle registration settled, buyer sentiments have improved in the last few days. "Car buying being a discretionary purchase, so sentiments are very important. Therefore, you find sometimes there is disproportionate effect in terms of sales...I think in the last few days there has been a change in sentiments partly of course due to festive season..now to see how far it will sustain then really we don't have a crystal ball to see..definitely as compared with previous months it is much better," he added.

In rural markets, the company sees a definite change in sentiment due to prospects of a very good kharif crop, he added.

MSI saw its market share dip by over 2 percentage points during April-August this year and slip below 50 per cent in the domestic passenger vehicle segment.

The company sold 5,55,064 units this fiscal as compared with 7,57,289 units during April-August previous year. Its market share has come down from 52.16 per cent last year to 49.83 per in April-August this year.

"We have gone down in the SUV segment and this is the vertical which has de-grown the least. So there has been an impact on market share. Also, there have been new launches in this segment," Srivastava said adding that the launch of S-PRESSO would help it gain as there is no competition for it right now.

When asked about the company's current inventory position, Srivastava said the figures vary from one region to another.

"Overall, it should be around 35 days from a peak of 42-43 days earlier. It is comfortable, but yes lower the better obviously," he added.

Srivastava said as per the data collated by the company, around 190 parent dealerships have closed down across the country due to the slowdown.

"Out of this, Maruti Suzuki has seen just seen seven closures over the last two years," he noted.

He attributed the closures due to pressure on profitability.

"Promotion levels are high, volumes are low..so absolutely there is a pressure. It happens with every industry which is facing headwinds..I think in January, we have increased dealer margins for different models," Srivastava said.