Maruti Suzuki flags pressure in urban demand

Not only consumer electronics and FMCG companies, but also carmakers have observed a weakening of consumer sentiment in urban markets. Today, India’s largest passenger car maker Maruti Suzuki flagged the sluggish consumer demand from the urban part of the market. However, the rural market demand remains strong.

“Rural market is doing pretty well. In the first half of the financial year, the rural market growth has been to the tune of 8%. But the urban is under pressure. It was negative 2%,” said Partho Banerjee, Maruti Suzuki’s senior executive officer for Marketing and Sales, while speaking to reporters after announcing the company’s second-quarter results.

Maruti Suzuki’s management noted that the weakness in urban demand reflects the impact of several state elections and high monsoon in certain areas. Heatwaves in the earlier part of the financial year, and heavy monsoon in some parts of the company have impacted the traffic across dealerships, particularly in urban areas.

For the peak festival season, the company said it is witnessing good traction in both urban and rural areas. The automaker is set to clock a new record in its October retail sales this time as Navratri, Dhanteras and Diwali, all fall in a single month this year, unlike the previous years.

The recent release monthly economic survey by the finance ministry has also highlighted a slowdown in overall urban demand , while rural consumption is witnessing some revival.