Expect uptrends in diesel car segment to continue: Maruti Suzuki
If you missed our coverage, here are the top ten stories of the day
Maruti Suzuki, the country’s largest carmaker, posted highest ever monthly sales in March at 1, 25,952 units, 3.28 per cent jump from 1, and 21,952 units in the same month last year. However, sales of the company's mini segment cars; including the M800, A-Star, Alto and WagonR, fell by 10.16 per cent to 52,826 units from 58,799 units in March, 2011.
Shashank Srivastava, CMO, Maruti Suzuki told NDTV Profit that the diesel car sales will continue be high in future. “We are trying to match demand for diesel cars by increasing our supply and we do expect uptrends in the diesel car segment to continue,” he said
Shares of Maruti Suzuki rose as much as 2.1 per cent in the morning on Wednesday, after Morgan Stanley upgraded the stock to overweight from equal-weight. It has also raised Maruti Suzuki’s target price to Rs 1,599 from Rs 1,181. It has added the automaker to its focus list replacing Bajaj Auto as it expects the company to add 1 per cent of market share in FY13. “Fiscal year 2012 seems to be a year of car recovery, “said the global financial services firm.
Below is the complete interview. Also watch the accompanying video here.
Q: You had a good set of numbers which was primarily driven by Dzire and new Swift. However the other segments such as the mini segment sales have seen a decline. Are there some concerns with the other segments?
Market is divided into petrol and diesel variants, a decline of petrol car sales has been 15 per cent in the industry and the diesel car sales increase has been about 35 per cent. In case of new Swift and new Dzire, we have seen the huge uptrends from 12k of Swift to 20k of new Swift and 9k of Dzire to 16k of new Dzire. These two models have done really well after their new variants were introduced in the market.
The mini car segment doesn’t have the diesel variant across the industry, some of the top performer of the industry like Alto, wagon R, i10, Santro, Eon, Estilo, A-Star are all the petrol version the only car available in this segment with a diesel version is Beat, so that has affect this segment quite a lot and that the reason the segment has actually not performed and seen decline last year while the overall industry growth has been 4.5 per cent we has seen decline in small car segment. The other segment like sedan which has got diesel segment has shown positive growth.
Q: This quarter has seen a huge contribution from diesel sale, almost 30 per cent in Fy12. For FY13, do you see this immense penetration to continue? Can you give us ballpark figures?
The continuing penetration of diesel car segment is because in the budget there were expectations that there will be differential tax on the diesel vehicles and that didn’t happen and the 2 per cent excise duty increase applies across all the petrol and diesel variant, so this tends will continue and the price difference between petrol and diesel prices at the retail points is roughly Rs 24. And penetration of the diesel vehicles was about 35-36 per cent which has increased to 50 per cent.
Maruti Suzuki is trying to increase the diesel engine supply because we have a constant in term of supply which resulted in the long waiting period of our diesel version weather its Ritz or Desire or Swift and we have the capacity of 300k diesel car and we have 100k extra engine coming ever year from fiat. So, we are trying to match this demand by increasing our supply and we do expect these uptrends in diesel car to continue.
Q: Your new launch Ertiga which shall launch this April. What are the kind of targets and synergies that you are working in for Ertiga?
We are going to launch Ertiga on 12th of this month and this vehicle is compact MPV segment, where we have never approached the market. We believe that if we launch this car and do well then we will have additional source of volumes for us and we will be able to hold on our market share. So this is an important segment to enter in and right now all our energies are focused on how to make Ertiga a success. As far as its volume is concerned, we don’t keep one particular volume in mind. We keep our production system flexible so in case there is uptrend in the demand, we will be able to supply those vehicles.