Nothing to be euphoric about Maruti's on-year 87% sales rise

New Delhi: Expectations of a good festival season offtake, improved production at Manesar facility after a deadly riot earlier this year perhaps accounted for car market leader Maruti Suzuki India dispatching 96,002 cars to its domestic dealerships this October. This is an increase of about 8% from 88801 cars it dispatched in the previous month (September 2012) but significantly higher by almost 87% (51458 units) over October 2011.

That is because Maruti was again experiencing labour trouble last October and had lost production of almost 40,000 units that month together at Gurgaon and Manesar facilities.

So, the hefty year-on-year increase is not so much about euphoria in domestic sales as about comparison with a month when production was severely affected.

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[caption id="attachment_510805" align="alignleft" width="380"] According to a company statement this morning, Maruti dispatched almost 70 percent more mini cars (M800, A-Star, Alto and WagonR) last month at 42,233 units[/caption]

Also, this year Dussehra and Diwali have been spread over the second half of September and October, thus forcing vehicle makers to increase dispatches in these two months unlike last year when the dispatches were higher in August and September.

For the last several months, demand of petrol cars has been declining while that for diesel vehicles has been rising.

Since Manesar was locked out for almost a month and then witnessed slow production ramp-up, diesel car production has been impacted for Maruti.

The company admitted in a recent concall with analysts that almost 1.25 lakh orders are pending for supply of diesel cars.

It remains to be seen how much growth has Maruti recorded in retail sales though, which means sales from dealers to actual customers during October.

The company sold over 70,000 diesel vehicles against 1,00,000 units in June quarter this fiscal. Also, during the last quarter, unusually high discounts for petrol cars were seen at Rs 14,750 per car compared to Rs 11,650 in the June quarter.

According to a company statement this morning, Maruti dispatched almost 70 percent more mini cars (M800, A-Star, Alto and WagonR) last month at 42,233 units (25,009 units), perhaps helped by the new Alto 800 which has already seen over 10,000 bookings.

Dispatches in the compact segment of Swift, Estilo and Ritz were more than twice of the same month last year at 22459 units (10859 units) since manufacturing of the Swift was impacted by the plant trouble last year.

The Swift is Maruti's largest selling car after the Alto. The Dzire witnessed increase of almost three times at 14389 units (5001 units) last month whereas SX4 was more than double at 695 units (320 units).

Though luxury sedan Kizashi saw dispatches rise manifold to 35 units from just 3 in October 2011, the company is now offering this car at a large discount to customers because of its lacklustre performance.

A story in the Times of India this morning speaks of Maruti stopping imports of the Kizashi and dealers offering Rs 5 lakh in discounts to clear stocks.

It is priced at Rs 16.5 lakh for the manual version and Rs 17.5 lakh for automatic (prices ex-showroom Delhi).

Maruti reported exports of 7106 units against just 4137 in October last year.

But its performance in the UV segment remained impressive where Ertiga remains in high demand. Total sales of Gypsy, Grand Vitara and Ertiga stood at 7400 units (270 units). But vans Eeco and Omni declined over 12%.