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Maruti Suzuki Expects Replacement Of BS-IV Cars To Drive Sales In Future

Car sales may also go up if people want to move away from public transport after coronavirus lockdown, Maruti Suzuki says.

The Maruti Suzuki India Ltd. logo is displayed on a vehicle at a dealership in New Delhi, India (Photographer: Sanjit Das/Bloomberg)
The Maruti Suzuki India Ltd. logo is displayed on a vehicle at a dealership in New Delhi, India (Photographer: Sanjit Das/Bloomberg)

Once the uncertainty stemming from the coronavirus outbreak settles down, India’s largest carmaker expects demand to increase as buyers look to upgrade from vehicles complying with older emission standards.

People who have Bharat Stage IV vehicles might want to change to newer cars and replacement buying might get accelerated, Shashank Srivastava, executive director (marketing and sales) at Maruti Suzuki India Ltd., said.

His optimism comes even as the maker of the Swift hatchback saw sales tumble nearly 47 percent year-on-year to 83,792 units in March as people stayed indoors. India is under a three-week lockdown to contain the spread of the Covid-19 pandemic that has infected more than a million people globally, including over 2,000 in India.

Car sales may also go up if people want to move away from public transport, Srivastava said. “When the lockdown was opened in China, consumer survey surprisingly said that demand for personal cars will go up as consumers will go away from public transport, which is a positive for the automakers.”

In India though, a car is a discretionary spend and the sentiment has to improve for the demand to see an uptick. “After a lockdown, the system gets shaken and people take time.”

Also Read: Maruti Suzuki Sells More Than Two Lakh BS-VI Cars In Six Months

Helping Dealers

The bigger problem would be financing inventory for dealers. “On the retail side, we will see a rollover and we have seen liquidity infused in the system,” he said. “On the inventory side, we need to have a quick churn for the dealers to be able to take the financing for the future and that is a big problem.”

Also Read: Hero MotoCorp Seen Most Vulnerable Despite BS-IV Relief

Srivastava says Maruti Suzuki has transferred a lot of cash to dealers accounts to help them. “We will continue to make investments in the market.”