Maruti Suzuki expects slow growth for auto industry till June 2012

India’s largest passenger vehicle maker, Maruti Suzuki India Limited (MSIL), anticipates a 7-10% growth in car sales in India during the current fiscal year, more than twice the growth exhibited by the industry during the Fiscal Year 2011-12. The projected growth, however, is still less than the 30% sales growth achieved by the industry in 2010-11. Maruti said that the company does not expect to see much growth until the end of June 2012. Shashank Srivastava, Maruti’s chief general manager (Marketing) said, “I don’t see the fundamentals changing at this point of time. The interest rates continue to be high. Fuel prices are actually high and rising. So I don’t see a significant change in the basic fundamentals and I think the first half of this fiscal year is going to be tough for the industry.” Industry experts believe that the festival season after September, as well as lower interest rates will result in higher car sales. During Fiscal year 2011-2012, Maruti’s overall sales declined by 11% due mainly to the shift in customer preference from petrol to diesel cars, as well as labor problems at the company’s Manesar plant, which led to production disruptions. The company is now increasing the production capacity of its diesel engines, and is slated to introduce its first compact Multi Purpose Vehicle (MPV) named Ertiga by the end of this month. Srivastava said that with the launching of Ertiga, the company expects higher sales during the current fiscal year. Following the increase in excise duties levied by the Union Budget, Maruti will increase the prices of its vehicles this month. (April 11, 2012)