Maruti Suzuki India Ltd, India’s largest carmaker, is cautious on whether the sales momentum seen since the lockdown was eased will sustain beyond the festive season because of concerns over demand in the urban markets.
Chairman RC Bhargava said while there is no need for a cut in taxes on passenger vehicles, the government should frame a stimulus plan for the industry if sales dip sharply next year.
“The impact of people wanting to buy vehicles for personal use and festivals will be over by December. The rural segment will continue to grow substantially. We don’t know how urban demand will be and how much income people in urban markets will be left with,” Bhargava told reporters. “I don’t see any strong urban demand after the festivals as people can’t afford vehicles even if they want to buy them.”
Maruti on Thursday reported a 1% rise in net profit from a year ago to Rs1,371.6 crore in the September quarter. Profit lagged the Rs1,519.5 crore estimate in a Bloomberg survey. Profit was hit by a 34.5% drop in other income, a 76% increase in taxes, and a 70 basis points jump in raw material cost to 74% of net sales in the period.
Easing of the nationwide lockdown from May coupled with pent-up demand and festive season sales helped drive sales of Maruti cars in the quarter.
{{/usCountry}}Easing of the nationwide lockdown from May coupled with pent-up demand and festive season sales helped drive sales of Maruti cars in the quarter.
{{/usCountry}}The company’s total vehicle sales jumped 16% during the quarter to 393,130 units. The company sold just 36,775 units in the June quarter when the country was in the middle of the lockdown.