Maruti Suzuki Sales Dip In Q1, Festive Period Seen As Key To Recovery

Suzuki Motor Corporation (SMC) has faced a challenging start to 2024 in the Indian market, with slower-than-anticipated growth due to adverse weather conditions and the impact of political events. At the announcement of FY 2024 financial results, SMC officials said the first quarter in India was a period of lower sales activity, but this year was particularly weak, primarily driven by the general election, heavy rains, and heat waves. These factors have led to higher inventory levels, prompting Suzuki to adjust its strategies while anticipating a stronger second half of the year driven by the festive season.

Suzuki’s growth in India during the first quarter has been muted, with progress rates between 20-22 per cent. This is lower than expected, as the market felt the effects of election uncertainty and unfavourable weather conditions that dampened consumer demand. As inventory levels increased, the company has had to manage its production output and sales plans accordingly.

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The company remains optimistic about a recovery in the second and third quarters, with the festive season expected to drive a significant surge in demand. This year’s festivities are set to begin earlier, in late August, and typically see an uptick in consumer spending, particularly on automobiles. Suzuki projects that growth during this period could increase to 25-30 per cent, compared to the slower first quarter. The early start of the festive season, coupled with peak demand closer to Diwali in late October, is anticipated to boost sales volumes.

Suzuki’s positive outlook is also shaped by recent political developments. With Prime Minister Narendra Modi to remain in power and a new Union Budget already decided, the company sees a stable environment for growth. Senior management at Suzuki recently met with the Prime Minister, who reaffirmed his commitment to fostering industry growth, reinforcing confidence that the market will continue to expand.

According to the Society of Indian Automobile Manufacturers (SIAM), the overall growth forecast for India’s automotive sector in 2024 is modest, at around 2-3 per cent year-on-year. Suzuki aligns with this forecast but plans to ramp up efforts in the second half of the fiscal year. The company is looking to meet its original sales targets through a combination of strategic adjustments and leveraging government initiatives to support the sector.