Maruti Suzuki expects car sales growth to continue

Maruti Suzuki India Ltd. said it expects local vehicle sales and exports to continue growing. The growth, the company said, will be because of a series of economic stimulus packages taken by the federal government and several marketing schemes. Factors that contributed to the growth include the expansion of Maruti’s distribution network into rural areas and new marketing schemes for government employees is helping the growth in sales. The company ramped up its network last year to 681 sales outlets in 454 cities from 600 in 393 cities. A cut in factory levies and additional spending of Rs200 billion (US$ 4 billion) to improve infrastructure also helped the company’s growth, as did the Reserve Bank of India’s lowering of the repurchase rate by 400 basis points since early October to 5% and the cash reserve ratio, or the proportion of deposits banks must set aside as cash, by an equal amount to 5%. Maruti, India’s biggest carmaker based on sales, posted a 22% rise in vehicle sales in March, the third straight month of growth. Sales increased 24% in February and 5.4% in January. (April 2, 2009)