Rural India drives 44% of Maruti Suzuki’s August 2023 sales volumes
India’s largest carmaker has registered a better rural growth rate of 13 percent compared to urban India and is optimistic about a normal Kharif crop sowing to be a further growth enabler.
India’s largest carmaker, Maruti Suzuki India (MSIL), which clocked sales of 156,114 units in August 2023, registering a 16.4 percent year-on-year increase over August 2022’s 134,166 units, saw rural India contribute 44.1 percent to its total monthly volumes.
The company registered a higher rural growth rate of 13 percent, compared to 10 percent annual growth witnessed for urban India, on the back of a good monsoon, and continuously improving sentiment in the hinterlands in the country. According to Shashank Srivastava, Senior Executive Officer, MSIL, “While there is an element of pent-up demand which is the reason behind the strong rural performance, the sentiment is improving continuously.”
“Although the Kharif crop sowing is normal, the month of August was particularly drier in terms of the rainfall. Therefore, we continue to closely monitor the situation in September to ascertain if the monsoon would have any impact on the overall growth in FY24,” Srivastava added.
With a GDP growth of 7.8 percent in the April-June 2023 quarter, MSIL says the correlation between GDP per capita and the growth of the automotive has been pegged at its highest ever of 0.983, making it a key driver of growth for the industry.
Slowdown in entry-level model sales
MSIL, which saw a significant 118 percent growth in SUV sales last month, also reported a noticeable 45 percent YoY decline in the sales of its entry-level Alto and S-Presso models, which clocked overall sales of 12,209 units (August 2022: 22,162).
“While we do see the festive season bring a fillip to the sales of these models, we do not expect any uptick in the small car segment in the current financial year. We expect the growth to remain flat in this segment, whereas it will be the B-segment cars and SUVs which will drive our growth,” explained Srivastava.
With a 16.4 percent YoY uptick in August 2023 wholesales, the carmaker is estimated to have achieved three-fold growth compared to its competition, which, according to MSIL, has registered a growth of 5.1 percent. As a result, the August 2023 performance has taken MSIL’s market share to 43.5 percent, registering a growth of 2.7 percentage points over last year.
On the retail front, the company estimates overall PV industry volumes of around 343,000 units (+7.3%), and says it has registered a 17.3 percent YoY uptick, and increasing its retail market share to nearly 44 percent. In a media interaction, Shashank Srivastava, Senior Executive Officer, Marketing & Sales, MSIL, said that while the network stock in the industry is estimated at 311,000 units, which hints at almost 30 days of inventory, it is not very high considering the overall growth in volumes in the PV market.
“Such high levels of stock were seen four years ago, but the situation is not worrisome considering the increased average volumes in the industry,” Srivastava said.
While it attributes the continued market demand as a key enabler of growth last month, the introduction of several new models in the SUV segment, have helped both MSIL as well as other OEMs. The second growth factor is the correlation of the overall economic growth with the growth of the automotive industry, while a clear visibility of future chip supplies, augurs well for the industry going forward.
“We saw an uptick in production availability for semiconductors leading to the consistent production over the last two months. The available semiconductor data shows clear visibility for the future, and we can say that the worst of the semiconductor issue is behind us now,” Srivastava said.
Setting the pace in SUV sales
The company, which became the No. 1 SUV manufacturer in August by selling 41,658 units across its UV models, says, it has achieved its long-term cherished desire. “With strong SUV sales in August, we are now the No. 1 manufacturer even on a cumulative April-August 2023 volumes basis. We have surpassed Mahindra & Mahindra, and are on track to grow further in the SUV segment,” he added. MSIL witnessed an SUV penetration of 48.6 percent last month, improving the SUV penetration by 5 percentage points. For its Grand Vitara midsize SUV, out of the total 210,000 bookings so far, the company has registered over 45,000 bookings for the strong-hybrid trims, which command a waiting period of around 3 months.
For MSIL, rural sales contributed 44.1 percent of the carmaker’s total volumes in August, and it registered a higher rural growth rate at 13 percent, compared to 10 percent for urban centres in the country. While it says the Kharif crop sowing is normal, the month of August was particularly drier in terms of the rainfall, and it continues to closely monitor the situation in September to ascertain if the monsoon would have any impact on the growth in FY24.
With a noticeable 45 percent decline in the sales of its entry-level cars – Alto and S-Presso, MSIL says it is not expecting the segment to grow this year. “For the current financial year, we are not expecting any uptick in small cars, and expect the segment to remain flat. On the other side, it is the B-segment and the SUVs that will power our growth,” Srivastava signed off.
Shashank Srivastava: “While we do see the festive season bring a fillip to sales entry level models, we do not expect any uptick in the small car segment in FY2024. We expect growth to remain flat in this segment, it will be the B-segment cars and SUVs which will drive our growth.
Luxury carmaker commences second phase of its Advanced Automotive Mechatronics training curriculum for workshop technici...
Noida-based IoT and telematics solutions provider Aeris Communications, which has EV OEMs and EV fleet and service provi...
Murugappa Group's Montra Electric joins forces with Exponent Energy for 15-minute charging e-three-wheelers
Murugappa Group’s EV brand to integrate Exponent’s proprietary battery pack e^pack into its line of electric three-wheel...