May sales are saying it clearly that customers are losing confidence with hike in fuel prices and jump in car prices. India’s largest car makers, Maruti Suzuki India too posted a drop of 5 % in the sales for the month of May 2012. The data shows that the gross domestic product growth skidded to 5.3 per cent which is a lot low than the expected 6.1 per cent. Few things can be inferred by the slump in Maruti Suzuki sales and these are as follows.
First thing that is causing low sales is lowac interest of buyers in buying new cars, therefore the number of buyers rushing to the showroom have been reduced massively. Due to lack of new buyers, sales are shrinking every month. First time buyers usually go for entry level cars, as this segment offers the most affordable cars which attract the new buyers. Maruti had been ruling this segment for a long time now but has seen too low sales in this segment which use to get volumes for the car maker. Maruti Suzuki India offers numerous entry level hatchbacks which are affordable and attract a lot of customers. The mini hatchback segment of Maruti India includes cars like Maruti 800, Maruti Wagon R and Maruti A-Star, the sales of this segment has fallen by 29)895 units. In the current financial year the sales have dropped 27% so far.
Second most prominent reason behind the decreasing sales is hike in petrol prices. Petrol price hike has taken a toll and are expected to be hiked further in the coming time. Maruti officials too said that the petrol car sales is likely to go down by 50,000 units, while the diesel car sales in India is expected to swell by 150,000 units. Maruti Suzuki India has plans to intensify its diesel engine segment, as customers are skewing away from petrol cars due to a simple reason that diesel costs 45% less than petrol. Therefore, customers are being tempted towards diesel cars due to the huge gap in prices of both the fuels. Though diesel cars are a little costlier but consumers are willing to pay a little more amount in order to save on fuel prices. Petrol prices have been following the upward trend since last year, Maruti despite that doled out lucrative discounts and offers on petrol cars to lure the customers to the showrooms and rev up petrol car sales.
High interest rates also played a spoilt sport in the car sales. The GDP growth slipped by 5.3 per cent while it skidded annually to 6.5 per cent.The new version of Maruti Swift Dzire continues to register good sales and is being proved as the star car of the company and saw a growth of 63.8 per cent in the month of May. While sales of premium hatchbacks offered by MSI like Maruti Swift, Maruti Estilo, Maruti Ritz saw a jump of 14.7 per cent in the month of May 2012. Maruti has also ramped up production of Maruti Swift Dzire and Maruti Swift hatchback to 31,0000 in 2012. However, on the other hand sales of its solo luxury sedan dropped drastically by 765 and Maruti Sx4′s sales slid by 85%.
The company introduced a new segment with a new utility vehicle, Maruti Ertiga almost two months back.Maruti’s new player in the compact MPV segment, Maruti Ertiga has been received well by the customers and has roped in bookings of 32,000 units ever since its launch back in the month of April. April saw growth of utility vehicle segment by 47.32 per cent while the usual car sales witnessed growth of 3.40 per cent as per the report given by SIAM. In May, sales of utility segment jumped to 603.1 per cent at 7734 units, this segment includes cars like Maruti Gypsy, Maruti Grand Vitara and Maruti Ertiga. However, the growth majorly is contributed by the new vehicle Maruti Ertiga as Maruti Gypsy is sold only to security forces.