Maruti Suzuki Expects Sales To Rebound In Second Half Of FY21
India’s largest carmaker expects sales to rebound in the second half of 2020-21, as the pandemic is forcing people to opt for personal mobility to minimise risk of contagion.
“The performance in terms of production and sales is going up every month,” RC Bhargava, chairman at Maruti Suzuki India Ltd., told shareholders at the company’s 39th annual general meeting on Wednesday. “We’re getting to levels that are very close to last year’s.”
India’s automakers were grappling with the worst slowdown in decades even before the virus hit. The world’s strictest lockdown, effective March 25, hammered production and sales at dealerships. After a washout in April, sales revived marginally in May and June. July was the best month since March.
While the maker of Baleno and Ciaz cars reported just 1.1% year-on-year fall in sales last month, they were 88.2% higher than June. Maruti Suzuki, during a post-earnings conference call on July 29, said it is witnessing an increase in first-time buyers.
“The growth of the automobile industry, particular cars, is a very good indicator of the economic health of the country,” Bhargava said. But it also relies on how other sectors and GDP grow. “We can’t be an ‘independent island’ in the economy.”
The focus, according to him, should be on the manufacturing sector. “The pandemic is creating greater awareness that this is the time to take radical steps that will lead to much faster growth of economy and much faster growth of manufacturing sector.”
No Salary Cuts
Bhargava said the company has announced a reduction in dividend due to a decline in profit. “The bonuses have also naturally been adjusted to reflect what happened to the earnings of the company.” But the carmaker hasn’t cut salaries of its employees, he said.
Maruti Suzuki posted its first quarterly loss on record as the pandemic disrupted operations. Its loss stood at Rs 249.5 crore in the three months ended June compared with a profit of Rs 1,435.5 crore a year ago.